Selected account balances of Howard Company for 2012 are as follows:
$\begin{array}{lr}
\text { Work in Process } & \$ 35,000 \text { Debit } \
\text { Finished Goods } & \$ 65,000 \text { Debit } \
\text { Cost of Goods Sold } & \$ 100,000 \text { Debit } \
\text { Factory Overhead } & \$ 22,000 \text { Debit }
\end{array}$
a.Were factory overhead costs underapplied or overapplied in 2012? Explain.
b.Prepare the journal entry to dispose of the factory overhead balance assuming the amount is immaterial.
c.Prepare the journal entry to dispose of the factory overhead balance using the allocation method.

Question

Selected account balances of Howard Company for 2012 are as follows:
$\begin{array}{lr}
\text { Work in Process } & \$ 35,000 \text { Debit } \
\text { Finished Goods } & \$ 65,000 \text { Debit } \
\text { Cost of Goods Sold } & \$ 100,000 \text { Debit } \
\text { Factory Overhead } & \$ 22,000 \text { Debit }
\end{array}$  
a.Were factory overhead costs underapplied or overapplied in 2012? Explain. 
b.Prepare the journal entry to dispose of the factory overhead balance assuming the amount is immaterial.
c.Prepare the journal entry to dispose of the factory overhead balance using the allocation method.

Quizplus · Accepted Answer

The Answer of Selected account balances of Howard Company for 2012 are as follows:
$\begin{array}{lr}
\text { Work in Process } & \$ 35,000 \text { Debit } \
\text { Finished Goods } & \$ 65,000 \text { Debit } \
\text { Cost of Goods Sold } & \$ 100,000 \text { Debit } \
\text { Factory Overhead } & \$ 22,000 \text { Debit }
\end{array}$  
a.Were factory overhead costs underapplied or overapplied in 2012? Explain. 
b.Prepare the journal entry to dispose of the factory overhead balance assuming the amount is immaterial.
c.Prepare the journal entry to dispose of the factory overhead balance using the allocation method.

Selected Account Balances of Howard Company for 2012 Are as Follows