Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oll fields. The company uses a job order costing system that applies manufacturing overhead cost to jobs on the basis of direct lobor. 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 (oll direct materials) $185,000 c. Ulity 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 bor(975 hours) Indirect labor Selling and administrative salaries $ 250,000 $ 90,000 $ 110,000 e. Maintenance costs incurred on account in the factory, $54,000. 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), n. Rental cost incurred on account, $120.000 (85% related to factory facilities, and the remoider related to seling and administrative facilities) 1. Manufacturing overhead cost was applied to jobs, $ ? Cost of goods manufactured for the year $770,000 K. Sales for the year (all on account) totoled $1.200,000. These goods cost $800,000 according to their job cost shoets. The balances in the inventory accounts at the beginning of the year were: Raw Materials Work in process Finished Goods $ 30,000 521.000 560,000 The balances in the inventory accounts at the beginning of the year were: Nork 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, AA. 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. Reg 1 Reg 2 Reg 3 Reg 4A Reg 40 Reg 5 Prepare Journal entries to record the preceding transactions. (If no entry is required for a transition/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 12 Raw materials were purchased for use in production, $200,000 on account.
