Problem 3-15 Journal Entries; T-Accounts; Financial Statements [LO3-1, LO3-2, LO3-3, LO3-4] points 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 $395,600 of manufacturing overhead for an estimated allocation base of 920 direct labor-hours. The following transactions took place during the year: eBook a. Raw materials purchased on account, $290,000. b. Raw materials used in production (all direct materials), $275,000. c. Utility bills incurred on account, $77,000 (90% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: Print References Direct labor (970 hours) Indirect labor Selling and administrative salaries $ 320,000 $ 108,000 $ 200,000 e. Maintenance costs incurred on account in the factory, $72,000 f. Advertising costs incurred on account, $154,000. g. Depreciation was recorded for the year, $90,000 (75% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $115,000 (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, $950,000. k. Sales for the year (all on account) totaled $2,100,000. These goods cost $980,000 according to their job cost sheets The balances in the inventory accounts at the beginning of the year were: Daw Materials Work in Process Finished Goods $ 48,000 $ 39,000 $ 78,000 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. 4B. 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. Req 1 Reg 2 Req3 Req 4A Req 4B Reg 5 Prepare journal entries to record the preceding transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet The entry for manufacturing overhead cost applied to jobs. Note: Enter debits before credits. Transaction General Journal Debit Credit Work in process Manufacturing overhead Record entry Clear entry View general journal _ Req 1 Req2 > Req 1 Reg 2 Reg 3 Req3 Req 4A Regla Req 4B Reg 4B Reg 5 Reg 5 Prepare a schedule of cost of goods sold. Froya Fabrikker A/S Schedule of Cost of Goods Sold Beginning finished goods inventory Add: Cost of goods manufactured Cost of goods available for sale Less: Ending finished goods inventory Unadjusted cost of goods sold Less: Overapplied overhead Adjusted cost of goods sold Req 1 Req1 Reg 2 Req3 Req 4A Reg 4A Reg 4B Req 5 Prepare an income statement for the year. Froya Fabrikker A/S Income Statement For the Year Ended Sales Cost of goods sold Gross margin Selling and administrative expenses: Utilities expense Salaries expense Advertising expense Depreciation expense Rent expense Net operating income Req 1 Reg 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.) View transaction list View journal entry worksheet No Transaction Debit Credit General Journal Manufacturing overhead Cost of goods sold