Question

Refer to the data in Exercise 3-25A. Freeman’s accountant found an error in the expense records from the year reported. Depreciation on manufacturing plant and equipment was actually $400,000, not the $480,000 as originally reported. The unadjusted cost of goods sold balance at year-end was $600,000.
In Exercise 3-25A
Manufacturing overhead costs ........................................................... $ 600,000
Direct labour cost............................................................................... 1,500,000
Machine hours................................................................................... 75,000
Requirements
1. Prepare the journal entry(s) to record manufacturing overhead costs incurred.
2. Prepare the journal entry to record the manufacturing overhead allocated to jobs in production.
3. Use a T-account to determine whether manufacturing overhead is underallocated or over-allocated and by how much.
4. Record the entry to close out the underallocated or overallocated manufacturing overhead.
5. What is the adjusted ending balance of cost of goods sold?


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  • CreatedApril 30, 2015
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