Answer Happy

Problem 5-17 Applying Overhead; Journal Entries; Disposition of Underapplied or Overapplied Overhead [LO4, LO5, LO7] The following information is taken from the accounts of Foster Corp. The entries in the T-accounts are summaries of the transactions that affected those accounts during the year. Manufacturing Overhead 428,000 (b) (a) 470,000 Bal. 42,000 Work in Progress Bal. 117,000 (c) 820,000 222,000 127,000 (b) 470,000 Bal. 116,000 Finished Goods Bal. 178,000 (d) 874,000 (c) 820,000 Bal. 124,000 Cost of Goods Sold (d) 874,000 The overhead applied to production during the year is distributed among the ending balances in the accounts as follows: Work in Process, ending $ 47,000 70,500 Finished Goods, ending Cost of Goods Sold Overhead applied 352,500 $470,000
Required: 1. Identify the reasons for entries (a) through (d). Item (a): Item (b): Actual manufacturing overhead costs for the year. Overhead cost applied to work in process for the year. Cost of goods manufactured for the year. Cost of goods sold for the year. Item (c): Item (d): 2. The company allocates any balance in the Manufacturing Overhead account to the other accounts in proportion to the overhead applied during the year that is in the ending balance in each account. Prepare the necessary journal entry. (If no entry is required for a transaction/event, select "No Journal entry required" in the first account field.) View transaction list View journal entry worksheet Ⓒ No Transaction General Journal Debit Credit A 1. Manufacturing overhead Direct materials cost Direct labour cost Manufacturing overhead