refer to the data in e17 19 brooks accountant found an 282528

Refer to the data in E17 19. Brooks’ accountant found an error in her 2012 cost records. Depreciation on manufacturing property, plant, and equipment was actually $550,000, not the $600,000 she originally reported. Unadjusted balances at the end of 2012 include:

Finished goods inventory . . . . . . . $ 131,000

Cost of goods sold . . . . . . . . . . . . . . 580,000

Data from E 17 19

Manufacturing overhead costs . . . . . . . . $ 840,000

Direct labor costs . . . . . . . . . . . . . . . . . . 1,550,000

Machine hours . . . . . . . . . . . . . . . . . . 70,000 hours

At the end of 2012, the company had actually incurred:

Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,160,000

Depreciation on manufacturing property,

plant, and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 600,000

Property taxes on plant . . . . . . . . . . . . . . . . . . . . . . . . . 40,000

Sales salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,500

Delivery drivers’ wages . . . . . . . . . . . . . . . . . . . . . . . . 23,500

Plant janitor’s wages . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,000

Machine hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67,000 hour

Requirements

1. Use a T account to determine whether manufacturing overhead is under allocated or over allocated, and by how much.

2. Prepare the journal entry to close out the under allocated or over allocated manufacturing overhead.

3. What is the adjusted ending balance of Cost of goods sold?