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 $360,000 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, $200,000. b. Raw materials used in production (all direct materials), $135,000. c. Utility bills incurred on account, $70,000 (90% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: Direct labor (975 hours) Indirect labor $230,000 $90,000 Selling and administrative salaries $110,000 e. Maintenance costs incurred on account in the factory, $54,000. f. Advertising costs incurred on account, $136.000. g. Depreciation was recorded for the year, $95,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $120,000 (85% related to factory facilities, and the remainder related to selling and administrative facilities). i Manufacturing overhead cost was applied to jobs, 5? J. Cost of goods manufactured for the year, $770,000 k. Sales for the year (all on account) totaled $1,200,000. These goods cost $800,000 according to their job cost sheets: Page 141 The balances in the inventory accounts at the beginning of the year were Raw Materials $30,000 Work in Process $21,000 Finished Goods $60,000 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.) Determine the ending balances in the inventory accounts and in the Manufacturing Overhead account. 3. Prepare a schedule of cost of goods manufactured. 4. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. Prepare a schedule of cost of goods sold 5. Prepare an income statement for the year.