At the End of the Period, Carson Company Had the Following

question 105

Essay

At the end of the period, Carson Company had the following balances in selected accounts:
Required:
a. Assuming the factory overhead balance is relatively small, prepare the journal entry to close the Factory Overhead account if the balance in the account is a debit balance. What does a debit balance mean?
b. Assuming the factory overhead balance is relatively small, prepare the journal entry to close the Factory Overhead account if the balance in the account is a credit balance. What does a credit balance mean?

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Definitions:

Minimum Funding Requirements

Regulated benchmarks that pension plans or other forms of retirement funds must reach to ensure they have sufficient assets to meet future obligations.

Plan Assets

Investments and other assets held by a pension or retirement plan to fund the benefits promised to participants.

GAAP

Generally Accepted Accounting Principles, a common set of accounting principles, standards, and procedures under which financial statements are prepared, applicable within a specific jurisdiction or country.

Asset Returns

Represents the earnings generated from an investment in assets, typically expressed as a percentage of the original investment cost.