Happy Days Balloon Company incurred $167,000 of manufacturing overhead costs during the year just ended. However, only $145,000 of overhead was applied to production. At the conclusion of the year, the following amounts of the year’s applied overhead remained in the various manufacturing accounts.
Applied Overhead
Remaining in Account
on December 31
Work-in-Process Inventory............................................... $29,000
Finished-Goods Inventory.................................................. 50,750
Cost of Goods Sold............................................................. 65,250
Required:
Prepare a journal entry to close out the balance in the Manufacturing Overhead account and prorate the balance to the three manufacturing accounts.