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Adjusting Entries Including Adjustment for Underapplied/Overapplied Factory Overhead Evanoff Company data are as follows: (a) Factory overhead is applied at a rate of 55% of direct labor costs. At the end of the year, the direct labor costs associated with the jobs still in process totaled $7,900. (b) A physical count of factory supplies at the end of the year shows that $5,100 of factory supplies were used during the year. (c) A review of the insurance policy files shows that $6,300 of insurance on the factory building and equipment has expired. (d) Depreciation expense for the year on the factory building was $8,500 and on factory equipment was $12,500, a total of $21,000. (e) The factory overhead account has a debit balance of $189,200 and a credit balance of $191,100 [after recording adjustments (a) through (d)]. Use Cost of Goods Sold for this adjustment Prepare the December 31 adjusting journal entries for Evanoff Company. Page: 1 DOC. POST NO. REF DEBIT CREDIT DATE ACCOUNT TITLE Dec. 31Work in Process Inventory 1 1 Factory Overhead 2 Apply factory overhead to work in process 3 Dec. 31 Factory Overhead Factory Supplies 4 4 5 5 Record actual factory overhead: Supplies 6 6 Dec. 31 Factory Overhead 7 7 Prepaid Insurance 8 8 Record actual factory overhead: Insurance 9 9 10 Dec. 31 Factory Overhead 10 Accumulated Depreciation-Factory Building 11 11 Accumulated Depreciation-Factory Equipment 12 12 Record actual factory overhead: Depreciation 13 13 14 Dec. 31 Factory Overhead 14 Cost of Goods Sold 15 15 Record over or under applied factory overhead 16 16

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