Question

The journal entry to write-off a significant underapplied overhead balance at the end of an accounting period is:

A. Applied Manufacturing Overhead xxx
Cost of Goods Sold xxx
Manufacturing Overhead Control xxx
B. Applied Manufacturing Overhead xxx
Cost of Goods Sold xxx
Manufacturing Overhead Control xxx
C. Applied Manufacturing Overhead xxx
Work-In-Process Inventory xxx
Finished Goods Inventory xxx
Cost of Goods Sold xxx
Manufacturing Overhead Control xxx
D. Applied Manufacturing Overhead xxx
Work-In-Process Inventory xxx
Finished Goods Inventory xxx
Cost of Goods Sold xxx
Manufacturing Overhead Control xxx
Option A
Option B
Option C
Option D

Answer 1

Option C

Step-by-step explanation:

The journal entry to write-off underapplied overhead is shown below:

Applied Manufacturing Overhead xxx

To Work-In-Process Inventory xxx

To Finished Goods Inventory xxx

To Cost of Goods Sold xxx

To Manufacturing Overhead Control xxx

(Being the underapplied overhead written off is recorded)

The work in process inventory, finished goods inventory, and the cost of goods sold would be written off based on the overhead applied.