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 $380,000 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, $220,000. b. Raw materials used in production (all direct materials) $205,000 c. Utility bills incurred on account, $63,000 (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 $ 250,000 $ 94,000 $ 130,000 e. Maintenance costs incurred on account in the factory, $58,000 f. Advertising costs incurred on account, $140,000. g. Depreciation was recorded for the year, $88,000 (85% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $113,000 (90% 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, $810,000. k Sales for the year (all on account) totaled $1,400,000. These goods cost $840,000 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 $ 34,000 $ 25,000 $ 64,000 CH 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 Req 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 View journal entry worksheet Debit No General Journal Credit Transaction 250,000 1 a. Raw materials Accounts payable 250,000 205,000 2 b. Work in process Raw materials 205,000 56.700 3 6,300 Manufacturing overhead Utilities expense Accounts payable 63.000 250,000 94.000 d Work in process Manufacturing overhead Post your entries to T-accounts. (Don't forget to enter the beginning inventory balances above.) Accounts Recelvable Sales Beg. Bal. Beg. Bal. End. Bal. End. Bal. Raw Materials Cost of Goods Sold Beg. Bal. Beg. Bal End. Bal. End. Bal. We+ in Process Manufacturing Overhead Beg. Bal. Beg Bal End. Bal End. Bal Advertising Expense Finished Goods Bea Bal Finished Goods Beg. Bal Advertising Expense Beg, Bal End. Bal End. Bal. Accumulated Depreciation Utilities Expense Beg. Bal. Beg Bal End. Bal. End. Bal Accounts Payable Salaries Expense Bog. Bal. Beg. Bal End. Bal. End. Bal. Salaries & Wages Payable Depreciation Expense Beg. Bal Beg. Bal. End, Bal End, Bal. Accumulated Depreciation Beg. Bal. Utilities Expense Beg Bal End. Bal End. Bal Accounts Payable Beg. Bal. Salaries Expense Beg Bal End. Bal End. Bal. Depretation Expense Salaries & Wages Payable Beg. Bal. Beg. Bat. End. Bal End. Bal. Rent Expense Bog. Bal. End. Bal. Prepare a schedule of cost of goods manufactured. Froya Fabrikker A/S Schedule of Cost of Goods Manufactured Direct materials: Total raw materials available Direct materials used in production Total manufacturing costs added to production Total manufacturing costs to account for 0 Cost of goods manufactured
