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 $329,000 of manufacturing overhead for an estimated allocation base of 940 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased on account, $205,000 b. Raw materials used in production (all direct materials), $190,000. cuelty bills incurred on account. $60,000 (90% related to factory operations, and the remainder related to selling and administrative d. Accrued salary and wage costs: Direct labor (2,015 hours) Indirect labor Selling and administrative salaries $ 235,000 $ 91,000 3 115,000 e. Maintenance costs incurred on account in the factory, $55,000 1. Advertising costs incurred on account, $137,000. g. Depreciation was recorded for the year, $85,000 (70% related to factory equipment, and the remainder related to selling and h. Rental cost incurred on account, $110,000 (75% related to factory facilities, and the remainder related to selling and administrative facilities) 1. Manufacturing overhead cost was applied to jobs, $_2 1. Cost of goods manufactured for the year, $780,000. k. Sales for the year (all on account) totaled $1,250,000. These goods cost $810,000 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 $ 31,000 $ 22,000 $ 61,000 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. 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 Req 3 Req 4A Reg 4B 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 A. WRRRR The maintenance costs were incurred on account in the factory, $55,000. Note: Enter debits before credits. Transaction General Journal Debit Credit e. Record entry Clear entry View general journal Journal entry worksheet ERE. The advertising costs were incurred on account, $137,000. Note: Enter debits before credits. Transaction General Journal Dobit Credit Record entry Clear entry View general Journal Journal entry worksheet The depreciation was recorded for the year, $85,000 (70% related to factory equipment, and the remainder related to selling and administrative equipment). Note: Enter debits before credits, Transaction General Journal Debit Credit g. Record entry Clear entry View general journal Journal entry worksheet The entry for manufacturing overhead cost applied to jobs. Note: Enter debits before credits. General Journal Debit Credit Transaction i. Record entry Clear entry View general Journal Journal entry worksheet . The cost of goods manufactured for the year, $780,000. Note: Enter debits before credits. General Journal Debit Credit Transaction I Record entry Clear entry View general journal Journal entry worksheet
