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 $360,000 of manufacturing overhead for an estimated allocation base of 900 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased on account, $200,000. b. Raw materials used in production (all direct materials), $185,000. c. Utility bills incurred on account, $70,000 (90% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: Direct labor (975 hours) Indirect labor Selling and administrative salaries $ 230,000 $ 90,000 $ 110,000 e. Maintenance costs incurred on account in the factory, $54,000. f. Advertising costs incurred on account, $136,000. g. Depreciation was recorded for the year, $95,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $120,000 (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, $770,000. k. Sales for the year (all on account) totaled $1,200,000. These goods cost $800,000 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 $ 30,000 $ 21,000 $ 60,000 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. Accumulated Depreciation Utilities Expense Beg. Bal. Beg. Bal. 95,000 g. C. End. Bal. 95,000 End. Bal. Accounts Payable Salaries Expense Beg. Bal. Beg. Bal. d. 110,000 200,000 a. 70,000 C. 54,000 e. 136,000 f. 120,000 h. End. Bal. 110,000 End. Bal. 580,000 Depreciation Expense Salaries & Wages Payable Beg. Bal. Beg. Bal. g. d. End. Bal. End. Bal. Rent Expense Beg. Bal. h. End. Bal. Reg 1 Reg 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 Beginning work in process inventory Direct materials: Beginning raw materials inventory $ 30,000 Add: Purchases of raw materials 200,000 Total raw materials available Less: Ending raw materials inventory Direct materials used in production Direct labor Manufacturing overhead applied to work in process Total manufacturing costs added to production Total manufacturing costs to account for Less: Ending work in process inventory Cost of goods manufactured 0 Req 1 Req 2 Req3 Req 4A Req 4B Req 5 Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction General Journal Debit Credit Req 1 Reg 2 Reg 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 Beginning finished goods inventory Add: Cost of goods manufactured Cost of goods available for sale Less: Ending finished goods inventory Unadjusted cost of goods sold Less: Overapplied overhead Adjusted cost of goods sold Req 1 Reg 2 Reg 3 Req 4A Req 4B Req 5 Prepare an income statement for the year. Froya Fabrikker A/S Income Statement For the Year Ended Sales Cost of goods sold Gross margin Selling and administrative expenses: 0 Utilities expense Advertising expenses Salaries expense Depreciation expense Rent expense 0 Net operating income $ 0