Final answer:
Adjusting entries for manufacturing overhead at the end of the year for Blossom Company and Crane Company involve debiting or crediting the cost of goods sold account to reflect under- or over-applied overhead costs respectively.
Step-by-step explanation:
The student's question involves adjusting entries for manufacturing overhead at the end of the year for two companies: Blossom Company with a debit balance and Crane Company with a credit balance. The adjustment is aimed to align the manufacturing overhead account with the actual incurred costs by transferring the balance to the cost of goods sold.
For Blossom Company, since there is a debit balance of $1,180 in manufacturing overhead, this indicates an under-applied overhead. The adjusting entry would be:
- Debit: Cost of Goods Sold $1,180
- Credit: Manufacturing Overhead $1,180
For Crane Company, the credit balance of $940 suggests over-applied overhead. The adjusting entry would look like this:
- Debit: Manufacturing Overhead $940
- Credit: Cost of Goods Sold $940
These entries ensure that the cost of goods sold reflects the actual manufacturing overhead costs for the year.