Problem 3-15 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 $378,000 of manufacturing overhead for an estimated allocation base of 900 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased on account, $285,000. b. Raw materials used in production (all direct materials). $270,000. c. Utility bills incurred on account. $76,000 (85% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: Direct labor (950 hours) Indirect labor Selling and administrative salaries 315,000 $ 107,000 $ 195,000 e. Maintenance costs incurred on account in the factory, $71.000 f. Advertising costs incurred on account: $153.000. 9. Depreciation was recorded for the year, $89.000 (70% related to factory equipment, and the remainder related to selling and administrative equipment). O te gw DOLL omework Saved Help Sa administrative equipment) h. Rental cost incurred on account, $114.000 (75% related to factory facilities, and the remainder related to selling and administrative facilities) i. Manufacturing overhead cost was applied to jobs, $_? 1. Cost of goods manufactured for the year. $940,000. k. Sales for the year (all on account) totaled $2,050,000. These goods cost $970,000 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 $ 47,000 $ 38,000 $ 77,000 Required: 1. Prepare journal entries to record the preceding transactions 2. Post your entries to T-accounts. (Don't 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. 4. Prepare a schedule of cost of goods sold. 5. Prepare an income statement for the year. Complete this question by entering your answers in the tabs below. Prey 3 of 4 Next > rch