Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Froya Fabrik A/S or Bergen, Norway, is a small company that manufactures speciatyheavy equipment for use in North Sea fields. The company uses a job-order

image text in transcribed
image text in transcribed
Froya Fabrik A/S or Bergen, Norway, is a small company that manufactures speciatyheavy equipment for use in North Sea fields. The company uses a job-order costing system that appites manufacturing overead cost to jobs on the basis of director hours. Its predetermined overhead rate was based on a cost formula that estimated $350.000 of manufacturing overhead foran estimated allocation base of 1000 direct labor-hours. The following transactions took place during the year. a. Raw materials purchased on account, $250.000 b. Raw materials used in production (all direct materials). $235,000 c. Utility bills incurred on account, $69,000 (90% related to factory operations, and the remainder related to selling and administrative activities) d. Accrued salary and wage costs Direct labor (1,075 hours) Indirect labor Selling and administrative salaries $ 280, eee 100,99 $ 160,000 e. Maintenance costs incurred on account in the factory, $64,000 1. Advertising costs incurred on account, $146,000. g. Depreciation was recorded for the year, 582,000 (75% related to factory equipment, and the remainder related to sing and administrative equipment). n. Rental cost incurred on account, $107.000 (80% related to factory facilities, and the remainder related to selling and administrative facilities). 1 Manufacturing overhead cost was applied to jobs, $_? J. Cost of goods manufactured for the year, $870,000. k. Sales for the year (all on account totaled $1700,000. These goods cost $900,000 according to the job cost sheets The balances in the inventory accounts at the beginning of the year were: Raw Materials Work in Process Finished Goods $ 40,000 $ 31,00 $ 70,000 Required: 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 4. Prepare a journal entry to close any balance in the Manufacturing Overhead account to cost of Goods Sold 48. Prepare a schedule of cost of goods sold. 5. Prepare an income statement for the year. Complete this question by entering your answers in the tabs below. Prey 101 Next > your rester . (Don't forget to enter the beginner s bove Process beg a

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Consolidated Financial Reporting

Authors: Paul Taylor

1st Edition

1853962503, 9781853962509

More Books

Students also viewed these Accounting questions