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 $357,000 of manufacturing overhead for an estimated allocation base of 1,020 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased on account, $260,000. b. Raw materials used in production (all direct materials), $245,000. c. Utility bills incurred on account, $71,000 (80% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: Direct labor (1,095 hours) Indirect labor Selling and administrative salaries $ 290,000 $ 102,000 $ 170,000 e. Maintenance costs incurred on account in the factory, $66,000 f. Advertising costs incurred on account, $148,000. g. Depreciation was recorded for the year, $84,000 (75% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $109,000 (80% related to factory facilities, 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, $890,000. k. Sales for the year (all on account) totaled $1,800,000. These goods cost $920,000 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 $ 42,000 $ 33,000 $ 72,000 Req 1 Reg 2 Req 3 Req 4A Reg 4B Req 5 Prepare a schedule of cost of goods manufactured. Froya Fabrikker A/S Schedule of Cost of Goods Manufactured Direct materials: $ Beginning raw materials inventory Add: Purchases of raw materials 42,000 260,000 302,000 57,000 Total raw materials available $ Less: Ending raw materials inventory Direct materials used in production Direct labor Manufacturing overhead applied to work in process Total manufacturing costs added to production Total manufacturing costs to account for 245,000 290,000 385,250 0 Cost of goods manufactured Req 1 Req 2 Req3 Req 4A Req 4B Req 5 Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. (If no entry is transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet x No Transaction General Journal Debit Credit 1 1 65,050 Manufacturing overhead Cost of goods sold 65,050 Req 1 Req 2 Req3 Req 4A Req 4B Prepare a schedule of cost of goods sold. Froya Fabrikker A/S Schedule of Cost of Goods Sold