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 $350,000 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, $250,000. b. Raw materials used in production (all direct materials), $235,000. c. Utility bills incurred on account, $69,000 (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 $ 280,000 $ 100,000 $ 160,000 e. Maintenance costs incurred on account in the factory, $64,000 f. Advertising costs incurred on account, $146,000. g. Depreciation was recorded for the year, $82,000 (75% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $107,000 (80% 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, $870,000. k. Sales for the year (all on account) totaled $1,700,000. These goods cost $900,000 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 $ 40,000 $ 31,000 $ 70,000 Accounts Receivable Sales Beg. Bal. 0 Beg. Bal. 0 k. 1,700,000 1,700,000 End. Bal. 1,700,000 End. Bal. 1,700,000 Cost of Goods Sold Beg. Bal. 0 Raw Materials 40,000 250,000 235,000 b. Beg. Bal. k. a. 900,000 End. Bal. 900,000 End. Bal. 55,000 Work in Process Manufacturing Overhead Beg. Bal. Beg. Bal. 0 b. 31,000 235,000 280,000 C. 62,100 d. d. 100,000 64,000 i. 1,075,000 e. 870,000. g. 61,500 End. Bal. 751,000 h. 85,600 1,075,000 701,800 End. Bal. Finished Goods Advertising Expense Beg. Bal. 70,000 0 Beg. Bal. f. 0. 870,000 146,000 900,000 k. End. Bal. 146,000 End. Bal. 40,000 Accumulated Depreciation Utilities Expense Beg. Bal. 0 Beg. Bal. 0 82,000 9. C. 6,900 End. Bal. 82,000 End. Bal. 6,900 Accounts Payable Salaries Expense Beg. Bal. 0 Beg. Bal. d. 160,000 250,000 a. 69,000 C. 64,000 e. 146,000 ft. 107,000 h. End. Bal. 160,000 End. Bal. 636,000 Depreciation Expense Salaries & Wages Payable Beg. Bal. 0 Beg. Bal. 0 g. 20,500 540,000 d. End. Bal. 20,500 End. Bal. 540,000 Rent Expense 0 Beg. Bal. h. 21,400 End. Bal. 21,400 Froya Fabrikker A/S Schedule of Cost of Goods Manufactured $ 40,000 Beginning work in process inventory Direct materials: Total raw materials available Direct materials used in production Total manufacturing costs added to production Total manufacturing costs to account for 40,000 Cost of goods manufactured Journal entry worksheet 1 Record the entry to close any balance in the manufacturing overhead account to cost of goods sold. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal Prepare a schedule of cost of goods sold. Froya Fabrikker A/S Schedule of Cost of Goods Sold