Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oll 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 $351,000 of manufacturing overhead for an estimated allocation base of 900 direct labor-hours. The following transactions took place during the year a. Raw materials purchased on account,$265,000 b. Raw materials used in production (all direct materials), $250,000. e utility bills incurred on account, $72,000 (85% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: s 295,000 103,000 s 175,000 Indirect labor Selling and administrative salaries e. Maintenance costs incurred on account in the factory, $67000 f. Advertising costs incurred on account, $149,000. g. Depreciation was recorded for the year, $85,000 (70% related to factory equipment, and the remainder related to selling and administrative equipment) h, Rental cost incurred on account, $110,000 (75% related to factory facilities, and the remainder related to selling and administrative facilities). L. Manufacturing overhead cost was applied to jobs, $ 2 j. Cost of goods manufactured for the year, $900,000. k. Sales for the year (all on account) totaled $1,850,000. These goods cost $930,000 according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were: s 43,000 $ 34,000 s 73,000 Finished Coods 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. 2 3 6 5 8 12 The raw materials were purchased for use in production, $265,000 on account. Note: Enter debits before credits. Debit Credit Transaction Journal a. Clear ertry Next He 1 3 2 5 6 7 8 2 The raw materials used in production (all direct materials), $250,000. Note: Enter debits before credits. General Journal b. Clear entry Record entry He 2 4 5 The utility bills were incurred on account, $72,000 (85% related to factory operations, and the remainder related to selling and administrative activities). Note: Enter debits before credits. General Journal Debit Credit C. Vlew general journal Clear entry Record entry prev 30f 4 Next > 2 3 6 The salary and wage costs accrued were $295,000 (Direct labor), $103,000 (Indirect labor), $175,000 (Selling and administrative salaries). Note: Enter debits before credits. Transaction General Journal Debit c d. Vlew general journal Record entry Help 12 1 2 345 6 78 The maintenance costs were incurred on account in the factory, $67,000. Note: Enter debits before credits. Debit General Journal Trans e. Clear entry Record entry Next > 2 3 6 7 8 12 The entry for rental cost incurred on account on buildings, $110,000 (75% related to factory facilities, and the remainder related to selling and administrative facilities). Note: Enter debits before credits. Transaction eneral Journal Debit Credit h. View general journal Clear entry 4 9 12 The entry for manufacturing overhead cost applied to jobs. Note: Enter debits before credits. Credit Debit General Journal Transaction I. View general journal Clear entry Record entry Next > K Prev3 of 4 6 7 8 9 1011 12 5 The sales for the year (all on account) totaled $1,850,000. Note: Enter debits before credits Credit Debit General Journal Transaction Clear entry Next > 3 of 4 He K1 5 6 78 910 11 12 The goods cost $930,000 according to their job cost sheets Note: Enter debits before credits. Debit k(2). Clear entry Record entry Next >