Problem 2-26A Journal Entries; T-Accounts; Financial Statements [LO2-1, LO2-2, LO2-3, LO2-4, LO2-5, LO2-6, LO2-7] 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 and 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 $374,000 of manufacturing overhead for an estimated allocation base of 1,100 direct labor-hours. The following transactions took place during the year (all purchases and services were acquired on account): a. Raw materials purchased for use in production, S235,000. b. Raw materials requisitioned for use in production (all direct materials), $220,000. c. Utility bills were incurred, 566,000 (90% related to factory operations, and the remainder related to selling and administrative activities). d. Salary and wage costs were incurred: Direct labor (1,175 hours) Indirect labor Selling and administrative salaries $265,000 $ 97,000 $ 145,000 e. Maintenance costs were incurred in the factory, $61,000. f. Advertising costs were incurred, $143,000. g. Depreciation was recorded for the year, $91,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on buildings, $116,000 (85% related to factory operations, 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, 5840,000. k. Sales for the year (all on account) totaled $1,550,000. These goods cost $870,000 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 $ 37,000 $ 28,000 $ 67,000 Required: 1. Prepare journal entries to record the above data. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction General Journal Debit Credit 1 a. 2 2 b X x 3 C. X X x 4 d. X XX 5 e. 6 f. X 9. x x 3 7 g X X 8 h. X X X X X 9 i. x 10 j 11 k(1). XX 12 k(2) 2.Post your entries to l-accounts. (Don't forget to enter the opening inventory balances below.) Determine the ending balances in the inventory accounts and in the Manufacturing Overhead account. Accounts Receivable Sales X X x X End. Bal. *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted End. Bal. *Red text indicates no response was expected in a cell or a formula-based calculation is incorre deducted. Raw Materials Cost of Goods Sold Beg. Bal. x x x x X End. Bal. *Red text indicates no response was expected in a cell or a formula-based calculation is incorre End. Bal. *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect: no points deducted deducted Manufacturing Overhead Work in Process X X Beg. Bal. X X x X x X x x x X X End. Bal. *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted. End. Bal. *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect: no points deducted Finished Goods Advertising Expense Beg. Bal. x x X x X End. Bal. *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect: no points deducted. End. Bal. *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect: no points deducted. Accumulated Depreciation Utilities Expense x X x End. Bal. *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect: no points deducted End. Bal. *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect: no points deducted Accounts Payable x Salaries Expense x X X x x X End. Bal Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no po deducted End. Bal. Red text indicates no response was expected in a cell or a formula-based calculation is incorrect: no points deducted. Depreciation Expense Salaries & Wages Payable X x x End. Bal. Red text indicates no response was expected in a cell or a formula-based calculation is incorrect: no points deducted. End. Bal. *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no po deducted Rent Expense x End. Bal. Red text indicates no response was expected in a cell or a formula-based calculation is incorrect: no points deducted. 3. Prepare a schedule of cost of goods manufactured. Froya Fabrikker A/S Schedule of Cost of Goods Manufactured Direct materials: X x x Materials available for use 0 Materials used in production $ 0 Total manufacturing cost 0 0 X Cost of goods manufactured $ 0 *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted. 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) General Journal Debit Credit No 1 Event 1 Froya Fabrikker A/S Schedule of Cost of Goods Sold X x x Goods available for sale 0 Unadjusted cost of goods sold 0 > Adjusted cost of goods sold $ 0 *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect: no points deducted. 5. Prepare an income statement for the year. Froya Fabrikker A/S Income Statement For the Year Ended XX 0 Selling and administrative expenses: X X X X X X 0 0 Red text indicates no response was expected in a cell or a formula-based calculation is incorrect: no points deducted. 6.Job 412 was one of the many jobs started and completed during the year. The job required $8,700 in direct materials and 35 hours of direct labor time at a total direct labor cost of $9,600. If the job contained four units and the company billed at 70% above the unit product cost on the job cost sheet, what price per unit would have been charged to the customer? Price charged for Job 412 per unit