The following information is taken from the accounts of Latta Company. The entries in the T-accounts are summaries of the transa
ctions that affected those accounts during the year. Manufacturing Overhead (a) 504,576 (b) 420,480 Bal. 84,096 Work in Process Bal. 3,520 (c) 786,000 326,500 94,500 (b) 420,480 Bal. 59,000 Finished Goods Bal. 31,000 (d) 678,000 (c) 786,000 Bal. 139,000 Cost of Goods Sold (d) 678,000 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 $ 28,320 Finished Goods, ending 66,720 Cost of Goods Sold 325,440 Overhead applied $ 420,480 For example, of the $59,000 ending balance in work in process, $28,320 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.
