3-15 (Algo) Journal Entries; T-Accounts; Financial Statements [LO3-1, LO3-2, LO3-3, LO3-4] Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor- hours. Its predetermined overhead rate was based on a cost formula that estimated $357,000 of manufacturing overhead for an estimated allocation base of 1,020 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased on account, $260,000. b. Raw materials used in production (all direct materials), $245,000. c. Utility bills incurred on account, $71,000 (80% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: Direct labor (1,095 hours) Indirect labor Selling and administrative salaries $ 290,000 $ 102,000 $ 170,000 e. Maintenance costs incurred on account in the factory, $66,000 f. Advertising costs incurred on account, $148,000. g. Depreciation was recorded for the year, $84,000 (75% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $109,000 (80% related to factory facilities, and the remainder related to selling and administrative facilities). i. Manufacturing overhead cost was applied to jobs, $? j. Cost of goods manufactured for the year, $890,000. k. Sales for the year (all on account) totaled $1,800,000. These goods cost $920,000 according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were: Raw Materials Work in Process Finished Goods Required: $ 42,000 $ 33,000 $ 72,000 1. Prepare journal entries to record the preceding transactions. 2. Post your entries to T-accounts. (Don't forget to enter the beginning inventory balances above.) 3. Prepare a schedule of cost of goods manufactured. 4A. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. 4B. Prepare a schedule of cost of goods sold. 5. Prepare an income statement for the year. Req 1 Req 2 Req 3 Req 4A Req 4B Req 5 Prepare journal entries to record the preceding transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 6 78 The raw materials were purchased for use in production, $260,000 on account. Note: Enter debits before credits. Transaction a. 12 General Journal Debit Credit Record entry Clear entry View general journal Req 1 Req 2 Req 3 Req 4A Req 4B Req 5 Post your entries to T-accounts. (Don't forget to enter the beginning inventory balances above.) Accounts Receivable Debit Credit Beginning Balance Ending Balance Debit Beginning Balance Ending Balance Sales Credit Raw Materials Cost of Goods Sold Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Work in Process Manufacturing Overhead Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Finished Goods Advertising Expense Debit Credit Debit Credit Beginning Balance eginning Balance nding Balance Ending Balance Accumulated Depreciation Utilities Expense Debit Credit Debit Credit eginning Balance Beginning Balance inding Balance Ending Balance Accounts Payable Salaries Expense Debit Credit Debit Credit Beginning Balance eginning Balance inding Balance Ending Balance Depreciation Expense Debit Credit Debit Beginning Balance Beginning Balance Ending Balance Rent Expense Debit Credit Beginning Balance Ending Balance Ending Balance Salaries & Wages Payable Credit