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 5 285,000 $ 101,000 $ 165,000 e Maintenance costs incurred on account in the factory, $65,000 Advertising costs incurred on account, $147,000 g. Depreciation was recorded for the year, 583,000 (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 facilitieel L. 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 5 71, 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. 4. 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. 1 2 3 4 5 6 7 8 ... 12 > The raw materials were purchased for use in production, $255,000 on account. Note: Enter debits before credits. Transaction General Journal Debit Credit a Journal entry worksheet The utility bills were incurred on account, $70,000 (95% related to factory operations, and the remainder related to selling and administrative activities). Note: Enter debits before credits. Transaction General Journal Debit Credit C. Journal entry worksheet 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. General Journal Debit Credit Transaction d. al entry worksheet 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 General Journal Debit Credit Transaction 9 Journal entry worksheet 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. General Journal Debit Credit Transaction h. Record the entry to close any balance in the manufacturing overhead account to cost of goods sold. Note: Enter debits before credits. General Journal Debit Credit Transaction 1 Record entry Clear entry View general journal Prepare a schedule of cost of goods sold. Froya Fabrikker A/S Schedule of Cost of Goods Sold Prepare an income statement for the year. Froya Fabrikker A/S Income Statement For the Year Ended 0 Selling and administrative expenses: 0 $ 0