sold. Pregare the necesear joumal entr (it no entry ls requred for a transaction

Question

sold. Pregare the necesear joumal entr (it no entry ls requred for a transactionlevent select "No Exercise 3-16 Applying Overhead, Journal Entries; Disposition of Underapplied or Overapplied Overhead [LO3-4, LO3-5, LO3-7 The following information is taken from the aocounts of Latte Company. The enbries in the T-accounts are summaries of the transactions that affected those 5coount, dunng the yeat Journal entry 480.000b) 90.000 Bal 15.000 710.000 200,000 70,000 85,000 390.000 Bal. 40.000 Finished Goods Cost of Goods Sold 50.000 710.000 840.000 d) 840.000 Bal 120.000 The ovechead that had been spplied to peoduction duting the year is distributed among the ending vbalaness in the sccounts as follows Prepare hemecessary Jburnal entryof no entry le required for a tranaaciorvevent aelect "No Jouns ntry nequinear in tre test account a. Do not round intameiaa caicuiations. Work in prooess, ending Finished goods, ending Cost of goods Sold S 19,500 58.500 312.000 Overhead spplied 3 390.000 ournal entry For cxampla, o the 540,000 anding balance in work in proc, $19,500 was averhead that had been applied during the year Resond th allcatian of any balancs in the manuactuingvrhead account

Explanation / Answer

Req 1. Under-applied Overheads: $ 70000 Journal entry for under-applied overheads: Cost of Goods sold Account Dr. 70000      Manufacturing Overheads 70,000 Req 2. Allocation of Under-applied Overheads: Inventory Balance Proportion Under- Allocation of Applied OH Under-applied OH Work in process 19500 5% 70000 3500 Finished Goods 58500 15% 70000 10500 Cost of goods sold 312000 80% 70000 56000 Total 390000 100% 70000 70000 Journal entry for under-applied overheads: Work in process inventory Dr. 3500 Finished Goods inventory Dr. 10500 Cost of goods sold Dr. 56000    Manufacturing overheads account 70000

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