Disposition of Over-or underapplied Factory Overhead. The following information is available concerning the inventory and cost of goods sold accounts of Hazelhurst company at the end of the most recent year;
Direct material
Direct labor
Applied factory overhead
Year-end balance
Applied Factory Overhead has already been closed to Factory Overhead Control. In all previous years,
Over -or underapplied Factory Overhead was treated as an adjustment to income or expense. Beginning inventories of the most recent year were insignificant.
Required : Give the journal entry to close Factory Overhead control, assuming;
(a) Underapplied Factory Overhead of $ 6,000 is to be allocated to inventories and cost of goods sold in proportion to the balances in those accounts.
(b) Overapplied Factory Overhead of $6,000 is to be allocated to inventories and cost of goods sold in proportion to the proportion o the balances in those accounts.
(c) Underapplied Factory Overhead of $6,000 is to be allocated to inventories and cost of goods sold in proportion to the amounts of applied Factory Overhead contained in those accounts.