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 $399,000 of manufacturing overhead for an estimated allocation base of 1,050 direct labor hours The following transactions took place during the year Raw materials purchased on account, $280,000 Raw materials used in production (all direct materials), $265,000 Utility bills incurred on account, $75,000 (80 related to factory operations, and the remainder related to selling and administrative activities) Accrued salary and wage costs Direct labor (1,100 hours) $ 310,000 Indirect labor $ 106,000 Selling and administrative salaries $ 190,000 Maintenance costs incurred on account in the factory, $70,000 Advertising costs incurred on account, $152,000 Depreciation was recorded for the year, $88,000 (85 related to factory equipment, and the remainder related to selling and administrative equipment) Rental cost incurred on account, $113,000 (90 related to factory facilities, and the remainder related to selling and administrative facilities) Manufacturing overhead cost was applied to jobs, $ Cost of goods manufactured for the year, $930,000 Sales for the year (all on account) totaled $2,000,000 These goods cost $960,000 according to their job cost sheets The balances in the inventory accounts at the beginning of the year were Raw Materials $ 46,000 Work in Process $ 37,000 Finished Goods $ 76,000 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 Beg Bal Beg Bal End Bal End Bal t of Goods Sold Beg Bal Beg Bal End Bal End Bal Work In Beg Bal Beg Bal End Bal End Bal Finlehed Goods Beg Bal Beg Bal End Bal End Bal e Expense Beg Bal Beg Bal End Bal End Bal salarles Expense Beg Bal Beg Bal End Bal End Bal Beg Bal Beg Bal End Bal End Bal t Expanse Beg Bal End Bal Complete this question by entering your answers in the tabs below Req 1 Req 2 Req 3 Req 4A Req 4B Req 5 Prepare a schedule of cost of goods manufactured Froya Fabrikker A S Schedule of Cost of Goods Manufactured Direct materials Total raw materials available Materials used in production Total manufacturing costs Cost of goods manufactured Req 2 Reg 4A Complete this question by entering your answers in the tabs below Req 1 Req 2 Req 3 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 required for a transaction event, select No journal entry required in the first account field ) No Transaction General Journal Debit Credit Prepare an income statement for the year Froya Fabrikker A S Income Statement For the Year Ended Selling and administrative expenses

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 17, 2024

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

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 $399,000 of manufacturing overhead for an estimated allocation base of 1,050 direct labor-hours. The following transactions took place during the year:

Raw materials purchased on account, $280,000.
Raw materials used in production (all direct materials), $265,000.
Utility bills incurred on account, $75,000 (80% related to factory operations, and the remainder related to selling and administrative activities).
Accrued salary and wage costs:


Direct labor (1,100 hours)	$	310,000
Indirect labor	$	106,000
Selling and administrative salaries	$	190,000

Maintenance costs incurred on account in the factory, $70,000
Advertising costs incurred on account, $152,000.
Depreciation was recorded for the year, $88,000 (85% related to factory equipment, and the remainder related to selling and administrative equipment).
Rental cost incurred on account, $113,000 (90% related to factory facilities, and the remainder related to selling and administrative facilities).
Manufacturing overhead cost was applied to jobs, $?.
Cost of goods manufactured for the year, $930,000.
Sales for the year (all on account) totaled $2,000,000. These goods cost $960,000 according to their job cost sheets.

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


Raw Materials	$	46,000
Work in Process	$	37,000
Finished Goods	$	76,000

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.

image text in transcribed

Beg. Bal Beg. Bal End. Bal End. Bal t of Goods Sold Beg. Bal. Beg. Bal. End. Bal End. Bal Work In Beg. Bal. Beg. Bal End. Bal End. Bal Finlehed Goods Beg. Bal. Beg. Bal End. Bal End. Bal e Expense Beg. Bal. Beg. Bal. End. Bal End. Bal salarles Expense Beg. Bal Beg. Bal End. Bal End. Bal Beg. Bal. Beg. Bal. End. Bal End. Bal t Expanse Beg. Bal End. Bal Complete this question by entering your answers in the tabs below Req 1 Req 2 Req 3 Req 4A Req 4B Req 5 Prepare a schedule of cost of goods manufactured. Froya Fabrikker A/S Schedule of Cost of Goods Manufactured Direct materials: Total raw materials available Materials used in production Total manufacturing costs Cost of goods manufactured Req 2 Reg 4A > Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 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 required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction General Journal Debit Credit Prepare an income statement for the year. Froya Fabrikker A/S Income Statement For the Year Ended Selling and administrative expenses