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 oll 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 $329,000 of manufacturing overhead for an estimated allocation base of 940 direct labor-hours. The following transactions took place during the year a. Raw materials purchased on account, $205,000 b. Raw materials used in production (all direct materials). $190,000 c. Utility bills incurred on account, $60,000 (90% related to factory operations, and the remainder related to selling and administrative activities) d. Accrued salary and wage costs Direct labor (1,015 hours) Indirect labor Selling and administrative salarie $ 235,000 $ 91.ee $ 115,000 e. Maintenance costs incurred on account in the factory, $55,000 f. Advertising costs incurred on account. $137,000. g. Depreciation was recorded for the year. $85,000 (70% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $110,000 (75% 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, $780,000 k. Sales for the year (all on account) totaled $1,250,000. These goods cost $810,000 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 $31.eee $ 22,000 $ 61,000 3. Prepare a schedule of cost of goods manufactured 4A. Prepare a journal entry to close any balance in the Manufacturing Overhead acqount to Cost of Goods Sold. 48. Prepare a schedule of cost of goods sold 5. Prepare an income statement for the year. Check Prepare a schedule of cost of goods manufactured. Froya Fabrikker A/S Schedule of Cost of Goods Manufactured Direct materials: Total raw materials available D 2 ILI EL Materials used in production 1 Total manufacturing costs 1111 TI Cost of goods manufactured Record the entry to close any balance in the manufacturing overhead account to cost of goods sold. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general Journal Reg 1 Reg 2 Req3 Req 4A Req 4B Reg 5 Prepare a schedule of cost of goods sold. Froya Fabrikker A/S Schedule of Cost of Goods Sold Prepare an income statement for the year. Froya Fabrikker A/S Income Statement For the Year Ended Selling and administrative expenses