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 $350,000 of manufacturing overhead for an estimated allocation base of 1,000 direct labor-hours. The following transactions took place during the year, a. Raw materials purchased on account, $250,000. b. Raw materials used in production (all direct materials) $235,000 c. Utility bills incurred on account, $69,000 (90% related to factory operations, and the remainder related to selling and administrative activities) d. Accrued salary and wage costs: Direct labor (1,075 hours) Indirect labor Selling and administrative salaries $ 280,000 $ 100,000 $ 160,000 e. Maintenance costs incurred on account in the factory, $64,000 1. Advertising costs incurred on account, $146,000 g. Depreciation was recorded for the year. $82,000 (75% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $107.000 (80% related to factory facilities, and the remainder related to selling and administrativo facilities) 1. Manufacturing overhead cost was applied to jobs. $. ? J. Cost of goods manufactured for the year. $870,000 k. Sales for the year (all on account) totaled S1700,000. These goods cost $900,000 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 $ 40,000 $31.00 $70,000 Next Hep Save 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. Reg 1 Reg 2 Reg 3 Reg 4A Req 48 Reg 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 Journal entry worksheet The raw materials used in production (all direct materials), $235,000. Note: Enter debits before credits. Transaction General Journal + Debit Credit b. Record entry Clear entry View general journal Journal entry worksheet The entry for rental cost incurred on account on buildings, $107,000 (80% related to factory facilities, and the remainder related to selling and administrative facilities). Note: Enter debits before credits Transaction General Journal Debit Credit h. Record entry Clear entry View general journal Journal entry worksheet
