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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
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 $373,700 of manufacturing overhead for an estimated allocation base of 1,010 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased on account, $255,000 b. Raw materials used in production (all direct materials), $240,000 c. Utility bills incurred on account, $70,000 (95% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: Direct labor (1,085 hours) Indirect labor Selling and administrative salaries 285,000 101,000 165,000 e. Maintenance costs incurred on account in the factory, $65,000 f Advertising costs incurred on account, $147,000. g. Depreciation was recorded for the year, $83,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment) h. Rental cost incurred on account, $108,000(85% 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, $880,000 k. Sales for the year (all on account) totaled $1,750,000. These goods cost $910,000 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 $41,000 $32,000 $ 71,000 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. 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 Complete this question by entering your answers in the tabs below Req 1Req 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 2 3 4 6 7 8 12 e raw materials were purchased for use in production, $255,000 on account. Enter debits before credits. saction General Journal Debit Credit a. Journal entry worksheet 4 12 The raw materials used in production (all direct materials), $240,000. Note: Enter debits before credits. Transaction General Journal Debit Credit b. The utility bills were incurred on account, $70,000 (95% related to factory operations, and the remainder related to selling and administrative activities) ote: Enter debits before credits. Transaction General Journal Debit Credit . 4 5 7 8 12 The salary and wage costs accrued were $285,000 (Direct labor), $101,000 (Indirect labor), $165,000 (Selling and administrative salaries) Note: Enter debits before credits. Transaction General Journal Debit Credit d. 2 3 4 7 12 The maintenance costs were incurred on account in the factory, $65,000. Note: Enter debits before credits. Transaction General Journal Debit Credit e. Journal entry worksheet 3 4 7 12 The advertising costs were incurred on account, 5147,00. Note: Enter debits before credits. Transaction General Journal Debit Credit Journal entry worksheet 2 4 7 12 The depreciation was recorded for the year, $83,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment) Note: Enter debits before credits. Transaction General Journal Debit Credit g. Journal entry worksheet 4 12 The entry for rental cost incurred on account on buildings, $108,000 (85% related to factory facilities, and the remainder related to selling and administrative facilities) Note: Enter debits before credits. Transaction General Journal Debit Credit h. 4 5 6 7 8 9 12 The entry for manufacturing overhead cost applied to jobs. Note: Enter debits before credits. Transaction General Journal Debit Credit Journal entry worksheet 1 5 678 90 12 The cost of goods manufactured for the year, $880,000. Note: Enter debits before credits. Transaction General Journal Debit Credit Journal entry worksheet K1.... 5 6 789 011 12 The sales for the year (all on account) totaled $1,750,000 Note: Enter debits before credits. Transaction General Journal Debit Credit Journal entry worksheet K1 5 6 78 9 1012 The goods cost $910,000 according to their job cost sheets Note: Enter debits before credits. Transaction General Journal Debit Credit k(2) Req 1 Req 2 Req 3 Req 4A Req 4B Req 5 Prepare a schedule of cost of goods manufactured. Froya Fabrikker A/S Schedule of Cost of Goods Manufactured Direct materials: Total raw materials available Materials used in production Total manufacturing costs Cost of goods manufactured K Req 2 Req 4A > Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 4B Req 5 Prepare a schedule of cost of goods sold Froya Fabrikker A/S Schedule of Cost of Goods Sold K Req 4A Req5 Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 4B Req 5 Prepare an income statement for the year Froya Fabrikker A/S Income Statement For the Year Ended 0 Selling and administrative expenses: 0 0 Req 4B Req 5
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