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 $357,000 of manufacturing overhead for an estimated allocation base of 1,020 direct labor-hours. The following transactions took place during the year:

Raw materials purchased on account, $260,000. Raw materials used in production (all direct materials), $245,000. Utility bills incurred on account, $71,000 (80% related to factory operations, and the remainder related to selling and administrative activities). Accrued salary and wage costs:

Direct labor (1,095 hours) $ 290,000 Indirect labor $ 102,000 Selling and administrative salaries $

170,000

Maintenance costs incurred on account in the factory, $66,000 Advertising costs incurred on account, $148,000. Depreciation was recorded for the year, $84,000 (75% related to factory equipment, and the remainder related to selling and administrative equipment). Rental cost incurred on account, $109,000 (80% related to factory facilities, and the remainder related to selling and administrative facilities). Manufacturing overhead cost was applied to jobs, $?. Cost of goods manufactured for the year, $890,000. Sales for the year (all on account) totaled $1,800,000. These goods cost $920,000 according to their job cost sheets.

The balances in the inventory accounts at the beginning of the year were:

Raw Materials $ 42,000 Work in Process $ 33,000 Finished Goods $ 72,000

Required:

1. Prepare journal entries to record the preceding transactions.

2. Post your entries to T-accounts. (Dont 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.

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 $357,000 of manufacturing overhead for an estimated allocation base of 1,020 direct labor-hours. The following transactions took place during the year:

Raw materials purchased on account, $260,000. Raw materials used in production (all direct materials), $245,000. Utility bills incurred on account, $71,000 (80% related to factory operations, and the remainder related to selling and administrative activities). Accrued salary and wage costs:

Direct labor (1,095 hours) $ 290,000 Indirect labor $ 102,000 Selling and administrative salaries $

170,000

Maintenance costs incurred on account in the factory, $66,000 Advertising costs incurred on account, $148,000. Depreciation was recorded for the year, $84,000 (75% related to factory equipment, and the remainder related to selling and administrative equipment). Rental cost incurred on account, $109,000 (80% related to factory facilities, and the remainder related to selling and administrative facilities). Manufacturing overhead cost was applied to jobs, $?. Cost of goods manufactured for the year, $890,000. Sales for the year (all on account) totaled $1,800,000. These goods cost $920,000 according to their job cost sheets.

The balances in the inventory accounts at the beginning of the year were:

Raw Materials $ 42,000 Work in Process $ 33,000 Finished Goods $ 72,000

Required:

1. Prepare journal entries to record the preceding transactions.

2. Post your entries to T-accounts. (Dont forget to enter the beginning inventory balances above.) Only T Account

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.

4 Problem 3-15 Journel Entries; TAccounts; Financial Stetements [LO3-1, LO3-2LO3-3, LO3-4) Froya Fabriker A/S of Bergen, Nonway, is a small compeny that manufactures speciaity hesvy equipment for use in North Sea a fields. The company uses job rder costing system that apples manufacturing overhead cost tojobG on the basis of direct abor- hous. Its predetermined overheed t ne was besed on cost formua that estimated $367000 of mer fectunng over-ed for an estimated alocation base of 1020 direct abor-hours.The following ansacions sook piace duning the yerr Raw matenals purchased on account, S260000 b. Raw matersis uced in production (all direct materiala $245,000 ewity blls incurred on account $7100080% related to factory operations, and the remainder re ated to seling and administrstva d. Accrued salary and wage coma e. Maintenance costs incured on account in the fectory, $86.000 f Adverssing cons incursed on account $148,000 Deprecation was recorded for the yeat $84,000(75% related to factory equipment and the remander related to wing and L Manufacturing overhead cost was appledto jobs, s Cost of goods manufactured for the yet $890,000 k, sales th* year (al on accoun"otaled $1,800,000 These goods cos, S920000 accordng ther job cost sheets The balances in the inventory accounts a th beginning of the year were ounits. (Dont 4A Prepare a jounal ey to close any balance in the account to Coss of Goods Sold B Prepare a schedule of com of goods sold 5. Prepare an Income statement for the year Complete this question by entering your answers in the tabs below Post your entries to T-accounts. (Don't forget to erber the beginning inventory balances above)