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:

Raw materials purchased on account, $200,000.

Raw materials used in production (all direct materials), $185,000.

Utility bills incurred on account, $70,000 (90% related to factory operations, and the remainder related to selling and administrative activities).

Accrued salary and wage costs:

Direct labor (975 hours)	$	230,000
Indirect labor	$	90,000
Selling and administrative salaries	$	110,000

Maintenance costs incurred on account in the factory, $54,000.

Advertising costs incurred on account, $136,000.

Depreciation was recorded for the year, $95,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment).

Rental cost incurred on account, $120,000 (85% 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, $770,000.

Sales for the year (all on account) totaled $1,200,000. These goods cost $800,000 according to their job cost sheets.

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. (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.

Accounts Receivable						Sales
Beg. Bal.	not attempted		not attempted			Beg. Bal.	not attempted	not attempted
			not attempted	not attempted		not attempted	not attempted	not attempted	not attempted
not attempted	not attempted		not attempted	not attempted		not attempted	not attempted	not attempted	not attempted
End. Bal.						End. Bal.
Raw Materials						Cost of Goods Sold
Beg. Bal.		not attempted				Beg. Bal.	not attempted	not attempted
				b		not attempted	not attempted	not attempted	not attempted
		not attempted		not attempted		not attempted	not attempted	not attempted	not attempted
		not attempted		not attempted		End. Bal.
End. Bal.
Work in Process						Manufacturing Overhead
Beg. Bal.			not attempted			Beg. Bal.	not attempted	not attempted
	t		not attempted	not attempted		not attempted	not attempted	not attempted	not attempted
			not attempted	not attempted		not attempted	not attempted	not attempted	not attempted
			not attempted	not attempted		not attempted	not attempted	not attempted	not attempted
not attempted			not attempted	not attempted		not attempted	not attempted	not attempted	not attempted
End. Bal.						not attempted	not attempted	not attempted	not attempted
						not attempted	not attempted	not attempted	not attempted
						End. Bal.
Finished Goods						Advertising Expense
Beg. Bal.						Beg. Bal.	not attempted	not attempted
						not attempted	not attempted	not attempted	not attempted
						not attempted	not attempted	not attempted	not attempted
						End. Bal.
End. Bal.
Accumulated Depreciation						Utilities Expense
Beg. Bal.						Beg. Bal.	not attempted	not attempted
						not attempted	not attempted	not attempted	not attempted
						not attempted	not attempted	not attempted	not attempted
End. Bal.						End. Bal.
Accounts Payable						Salaries Expense
Beg. Bal.						Beg. Bal.	not attempted	not attempted
						not attempted	not attempted	not attempted	not attempted
						not attempted	not attempted	not attempted	not attempted
						End. Bal.
End. Bal.
Depreciation Expense						Salaries & Wages Payable
Beg. Bal.						Beg. Bal.	not attempted	not attempted
						not attempted	not attempted	not attempted	not attempted
						not attempted	not attempted	not attempted	not attempted
End. Bal.						End. Bal.
Rent Expense
Beg. Bal.
End. Bal.