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 $378,000 of manufacturing overhead for an estimated allocation base of 900 direct labor-hours. The following transactions took place during the year: 09 a. Raw materials purchased on account. $285,000. b. Raw materials used in production (all direct materials) $270,000. c. Utility bills incurred on account. $76,000 (85% related to factory operations, and the remainder related to selling and administrative activities) d. Accrued salary and wage costs: Direct labor (950 hours) Indirect labor Selling and administrative salaries $315,000 $107.000 $ 195,000 e. Maintenance costs incurred on account in the factory, $71,000 1. Advertising costs incurred on account. $153,000. g. Depreciation was recorded for the year. $89,000 (70% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account. $114,000 (75% 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, $940,000. k Sales for the year (all on account) totaled $2,050,000. These goods cost $970,000 according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were: 9. Depreciation was recorded for the year, $89,000 (70% related to factory equipment, and the remainder related to selling and administrative equipment) h Rental cost incurred on account, $114.000 (75% related to factory facilities, and the remainder related to selling and administrative facilities) 1. Manufacturing overhead cost was applied to jobs, $_? Cost of goods manufactured for the year. $940,000 k. Sales for the year (all on account) totaled $2,050.000. These goods cost $970,000 according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were: Raw Materials Work in process Tinished Goode 547,000 $38,000 577,000 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 48. Prepare a schedule of cost of goods sold 5. Prepare an income statement for the year No Transaction General Journal Debit Credit 1 a 285,000 Raw materials Accounts payable 285,000 2 b. 270,000 Work in process Raw materials 270,000 3 C. Manufacturing overhead Utilities expense Accounts payable 64,600 11,400 76,000 4 d. Work in process Manufacturing overhead Salaries expense Salaries and wages payable 315,000 107.000 195,000 617.000 5 e. 71,000 Manufacturing overhead Accounts payable 71,000 OD f. Advertising expense Accounts payable 153,000 153,000 7 9 Manufacturing overhead Depreciation expense Accumulated depreciation 62,300 26,700 89,000 6 1. 153,000 Advertising expense Accounts payable 153,000 7 9 62,300 26,700 Manufacturing overhead Depreciation expense Accumulated depreciation 0 89,000 8 h. Manufacturing overhead Rent expense Accounts payable 85,500 28,500 114.000 9 399,000 Work in process Manufacturing overhead lo 399,000 10 j 940,000 Finished goods Work in process 940,000 11 k(1). 2,050,000 Accounts receivable Sales 2,050,000 12 k(2) 970,000 Cost of goods sold Finished goods 970,000 Sales Accounts Receivable Beg Bal Beg Bal 2,050,000 2,050,000 End. Bal. 2,050,000 End. Bal 2,050,000 Raw Materials Cost of Goods Sold Beg. Bal. Beg Bal a 285,000 970,000 270,000 b + End. Bal. 970,000 End. Bal 15,000 Work in Process Manufacturing Overhead Bog. Bal. $ Beg. Bal. b. d. C. 64,600 270,000 315.000 399,000 d. 107.000 71.000 62,300 85,500 >> 940,000 End Bal. 44,000 399,000 8,600 End. Bal. Finished Goods Advertising Expense Beg. Bal Beg. Bal. 940,000 153,000 153,000 940,000 970,000 End. Bal. 153,000 End Bal 30,000 Utilities Expense Accumulated Depreciation 38 Bog. Bal Beg Bal C 89,000 11,400 11.400 End. Bal. 89,000 End. Bal Accounts Payable Salaries Expense Beg Bal Beg Bal a d. 195.000 C. 285,000 76,000 71,000 153,000 114,000 End. Bal 195,000 End, Bal. 699,000 Depreciation Expense Salaries & Wages Payable Beg Bal Beg Bal 26,700 617.000 26,700 End. Bal. 617.000 End. Bal. > 3 d. 195.000 C 285,000 76,000 71.000 153,000 114,000 End. Bal 195.000 End. Bal 699,000 Depreciation Expense Salaries & Wagos Payable Bog. Bal. Bog. Bal. 26,700 617.000 End. Bal 26,700 End. Bal 617,000 Rent Expense Beg Bal 28,500 End. Bal 28,500 38,000 Froya Fabrikker A/S Schedule of Cost of Goods Manufactured Beginning work in process inventory Direct materials: Beginning raw materials inventory $ 47,000 Add: Purchases of raw materials 285,000 Total raw materials available 332,000 Less: Ending raw materials inventory 62,000 Direct materials used in production Manufacturing overhead applied to work in process Direct labor Total manufacturing costs added to production Total manufacturing costs to account for Less: Ending work in process inventory Cost of goods manufactured $ 270,000 38,000 $ 940,000 Complete this question Reg 1 Reg 2 Reg 3 Reg 4A Reg 4B Reg 5 Prepare a schedule of cost of goods sold. $ 77,000 940,000 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 Loss: Overapplied overhead Adjusted cost of goods sold Froya Fabrikker A/S Income Statement For the Year Ended Sales o Cost of goods sold Gross margin Selling and administrative expenses: Utilities expense Advertising expenses Salaries expense Depreciation expense Rent expense 0 $ $ 0