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 $329,000 of manufacturing overhead for an estimated allocation base of 940 direct labor-hours. The following transactions took place during the year:

1. Raw materials purchased on account, $205,000.
2. Raw materials used in production (all direct materials), $190,000.
3. Utility bills incurred on account, $60,000 (90% related to factory operations, and the remainder related to selling and administrative activities).
4. Accrued salary and wage costs:

Direct labor (1,015 hours)	$	235,000
Indirect labor	$	91,000
Selling and administrative salaries	$	115,000

5. Maintenance costs incurred on account in the factory, $55,000
6. Advertising costs incurred on account, $137,000.
7. Depreciation was recorded for the year, $85,000 (70% related to factory equipment, and the remainder related to selling and administrative equipment).
8. Rental cost incurred on account, $110,000 (75% related to factory facilities, and the remainder related to selling and administrative facilities).
9. Manufacturing overhead cost was applied to jobs, $?.
10. Cost of goods manufactured for the year, $780,000.
11. Sales for the year (all on account) totaled $1,250,000. These goods cost $810,000 according to their job cost sheets.

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

Raw Materials	$	31,000
Work in Process	$	22,000
Finished Goods	$	61,000

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