Problem 3-15 (Algo) Journal Entries; T-Accounts; Financial Statements [LO3-1, LO3-2, LO3-3, LO3-4] 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 $380,000 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, $275,000. b. Raw materials used in production (all direct materials), $260,000. c. Utility bills incurred on account, $74,000 (95% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: Direct labor (1,100 hours) Indirect labor Selling and administrative salaries $305,000 $ 105,000 $ 185,000 e. Maintenance costs incurred on account in the factory, $69,000 f. Advertising costs incurred on account, $151,000. g. Depreciation was recorded for the year, $87,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $112,000 (85% related to factory facilities, and the remainder related to selling and administrative facilities). 1. Manufacturing overhead cost was applied to jobs, $__? J. Cost of goods manufactured for the year, $920,000. k. Sales for the year (all on account) totaled $1,950,000. These goods cost $950,000 according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were: