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)	$	250,000
Indirect labor	$	94,000
Selling and administrative salaries	$	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).

i.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	$	34,000
Work in Process	$	25,000
Finished Goods	$	64,000

REQUIRED:

1. Prepare a schedule of cost of goods manufactured.

2A. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.

2B. Prepare a schedule of cost of goods sold.

3. Prepare an income statement for the year.