Manufacturing overhead account has a credit balance

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Manufacturing Overhead account has a credit balance of $7,000. Because it has a credit balance, the Manufacturing Overhead must be debited to close out the account to Cost of Goods Sold. GENERAL JOURNAL Date Account Titles and Explanation Debit Credit Manufacturing Overhead……………………………………… ..................... 7,000 Cost of Goods Sold….……………………………………………… 7,000 To close the Manufacturing Overhead account. This decreases the Cost of Goods Sold from $700,000 to an adjusted amount of $693,000.
4. Prepare an income statement for the year. (Do not prepare a schedule of cost of goods manufactured; all of the information needed for the income statement is available in the journal entries and T-accounts you have prepared.) ]
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