eta company had a remaining credit balance of 20 000 in 362960

ETA Company had a remaining credit balance of $20,000 in its under and over applied factory overhead account at year end. The balance was deemed to be large and, therefore, should be closed to Work in Process, Finished Goods, and Cost of Goods Sold. The year end balances of these accounts, before adjustment, showed the following:

Work in Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 75,000

Finished Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000

Cost of Goods Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000

a. Determine the prorated amount of the over applied factory overhead that is chargeable to each of the accounts.

b. Prepare the journal entry to close the credit balance in Under and Over applied Factory Overhead.