The following information is taken from the accounts of Latta Company. The entries in the T-accounts are summaries of the transactions that affected those accounts during the year.

The overhead that was applied to work in process during the year is distributed among the ending balances in the accounts as follows:

Work in process, ending.....................................$ 19,500Finished goods, ending..........................................58,500Cost of goods sold................................................312,000Overhead applied...............................................$390,000

For example, of the $40,000 ending balance in work in process, $19,500 was overhead that had been applied during the year.

Required:

1. Identify reasons for entries (a) through (d).

2. Assume that the company closes any balance in the manufacturing overhead account directly to cost of goods sold. Prepare the necessary journal entry

Transcribed Image Text:

Manufacturing Overhead 460,000 (b) (a) 390,000 Bal. 70,000 Work in Process Bal. 5,000 (c) 710,000 270,000 85,000 390,000 (b) Bal. 40,000 Finished Goods 50,000| (d) Bal 640,000 (c) 710,000 Bal. 120,000 Cost of Goods Sold (d) 640,000