Refer to the data in Exercise E3-39B. Benson Foundry's accountant found an error in the expense records from the year reported. Depreciation on manufacturing plant and equipment was actually $415,000, not the $470,000 it had originally reported. The unadjusted
Cost of Goods Sold balance at year-end was $560,000.
Data from Exercise E3-39B.
Manufacturing overhead costs ..................................................... $ 610,000
Direct labor cost ......................................................................... $1,500,000
Machine hours ................................................................................... 76,250
At the end of the year, the company had actually incurred the following:
Direct labor cost ......................................................................... $1,220,000
Depreciation on manufacturing plant and equipment .................. $ 470,000
Property taxes on plant .................................................................. $ 19,000
Sales salaries ................................................................................. $ 25,500
Delivery drivers' wages .................................................................. $ 14,500
Plant janitors' wages ........................................................................ $ 8,000
Machine hours ........................................................................ 55,500 hours
Requirements
1. Prepare the journal entry (entries) 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 under-allocated or over-allocated, and by how much.
4. Record the entry to close out the under-allocated or over-allocated manufacturing overhead.
5. What is the adjusted ending balance of Cost of Goods Sold?