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Happy Days Balloon Company incurred $167,000 of manufacturing overhead costs during the year just ended. However, only $145,000 of overhead was applied to production. At the conclusion of the year, the following amounts of the year's applied overhead remained in the various manufacturing accounts.
Applied Overhead Remaining in Account on December 31Work-in-Process Inventory $29,000Finished-Goods Inventory 50,750Cost of Goods Sold 65,250
Required: Prepare a journal entry to close out the balance in the Manufacturing Overhead account and prorate the balance to the three manufacturing accounts.
Consider how the amounts would differ if Bainbridge were to borrow the $100,000 at different interest rates and time periods. The results of the original data (option 1) have been entered in the following schedule. In the spreadsheet.
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