Question

1.
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 Manufacturing Overhead Work in Process Finished Goods 46,000 (d) 726,000 470,016 (b 391,680 Bal. 17,320 (c) 726,000 Bal 648,000 274,000 87,000 391,680 44,000 Bal. 78,336 Bal. 124,000 Bal. Cost of Goods Sold 648,000 The overhead that had been applied to production during the year is distributed among Work in Process, Finished Goods, and Cost of Goods Sold as of the end of the year as follows: Work in Process, ending Finished Goods, ending Cost of Goods Sold $21,120 59,520 311,040 $ 391,680 Overhead applied For example, of the $44,000 ending balance in work in process, $21,120 was overhead that had been applied during the year. Required: 1. Identify reasons for entries (a) through (d) 2. Assume that the underapplied or overapplied overhead is closed to Cost of Goods Sold. Prepare the necessary journal entry. 3. Assume that the underapplied or overapplied overhead is closed proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the necessary journal entry
2.

Answer 1

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	Solved first question as per HOMEWORKLIB POLICY. please post remaining as separate one.
Part 1:
Entry a	This entry is done to record actual manufacturing overhead incurred during the period
Entry b	This entry is recorded for the amount of manufacturing overhead applied based on predetermined overhread rates
Entry c	This entry is recorded to trasnfer completed goods from work in process to finished goods
Entry d	This entry is posted to record cost of goods sold which will reduce finished goods inventory
Part 2:
Event	Account	Debit	Credit
2	Cost of Goods Sold	$                           78,336
	Manufacturing Overheads		$ 78,336
	(being underapplied overhead recorded)
3	Work in Process Inventory	$                             4,224
	Finished Goods Inventory	$                           11,904
	Cost of Goods Sold	$                           62,208
	Manufacturing Overheads		$ 78,336
	(being underapplied overhead recorded)
	Allocation of 78336:
	Work in Process Inventory	21120/391680*78336	$    4,224
	Finished Goods Inventory	59520/391680*78336	$ 11,904
	Cost of Goods Sold	311040/391680*78336	$ 62,208