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

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 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 . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19,500 Finished Goods, ending . . . . . . . . . . . . . . . . . . . . . . . . . . 58,500 Cost of Goods Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312,000 Overhead 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 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. Provide supporting computations. Transcribed Image Text: Manufacturing Overhead
Work in Process
(a)
460,000 (b)
390,000
Bal.
15,000 (c)
710,000
Bal.
70,000
260,000
85,000
(b)
390,000
Bal.
40,000
Finished Goods
Cost of Goods Sold
Bal.
50,000 | (d)
640,000
(d)
640,000
(c)
710,000
Bal.
120,000

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