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 $372,000 of manufacturing overhead for an estimated allocation base of 1,200 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased on account, $240.000. b. Raw materials used in production (all direct materials). $225,000. c. Utility bills incurred on account. $67.000 (95% related to factory operations, and the remainder related to selling and administrative activities) d. Accrued salary and wage costs: Direct labor (1,275 hours) Indirect labor Selling and administrative salaries $ 270,eee $ 98,eee $ 150,eee e. Maintenance costs Incurred on account in the factory. $62000 f. Advertising costs incurred on account, $144,000. 9. Depreciation was recorded for the year, $80,000 (85% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account. $105.000 (90% 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. $850.000. k Sales for the year (all on account) totaled $1.600.000. These goods cost $880.000 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 $ 38,eee $ 29,eee $ 68,eee 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. 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. R2 RA R40 Regs Bales Post your entries to T-accounts. (Don't forget to enter the beginning inventory balances above.) Accounts Receivable Debet Credit Debit Beginning Balance Beginning Balance Credit Ending Bulacan Ending salar Raw Matering Coct of Goods Bold Credit Credit Debat Beginning Balance Debit Beginning Balance Ending Balance Ending Balaan Work In Process Manufacturing Overhead Credit Credit Debet Beginning Balance Debit Beginning Balance Ending Blonde Ending Balance Finished Goods Advertising Expence Credit Credit Debe Beginning Balance Debit Beginning Balance Ending Balance Ending Balance Ulities Expense Aboumulated Dapreolation Debit Beginning Balance Credit Credit Debit Beginning Balance Ending Balance Ending Balance Accounts Payable Balaries Expanse Credit Credit Debit Beginning Balance Debit Beginning Balance Ending Balance Ending Balance Deprecation Expanse Credit Balaries & wages Payable Debit Beginning Balance Debit Beginning Balance Credit Ending Balance Ending Balance Rent Expenso Credit Debit Beginning Balance Ending Botone
