Problem 3-15 (Static) 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 $360,000 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, $200,000. b. Raw materials used in production (all direct materials), $185,000. c. Utility bills incurred on account, $70,000 (90% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: Direct labor (975 hours) Indirect labor Selling and administrative salaries $ 230,000 $ 90,000 $110,000 e. Maintenance costs incurred on account in the factory, $54,000. f. Advertising costs incurred on account, $136,000. g. Depreciation was recorded for the year, $95,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $120,000 (85% 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, $770,000. k. Sales for the year (all on account) totaled $1,200,000. These goods cost $800,000 according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were: Raw Materials Work in Process $ 30,000 $ 21,000 Finished Goods $ 60,000 k. Sales for the year (all on account) totaled $1,200,000. These goods cost $800,000 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 Required: $ 30,000 $ 21,000 $ 60,000 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 Req 2 Req 3 Req 4A Req 48 Req 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 View journal entry worksheet No 1 Transaction General Journal Raw materials Accounts payable 2 b. Work in process Raw materials Debit Credit 200,000 200,000 185,000 185,000 Post your entries to T-accounts. (Don't forget to enter the beginning inventory balances above.) Accounts Receivable- Debit Beginning Balance k Ending Balance Beginning Balance a. Ending Balance Debit 1,200,000 1,200,000 Credit Sales. Debit Credit Beginning Balance 1,200,000 k Ending Balance 1,200,000 Raw Materials Cost of Goods Sold Credit Debit Credit 30,000 Beginning Balance 200,000 185,000 b. k 800,000 Ending Balance 800,000 45,000 Work in Process Manufacturing Overhead Debit Credit Debit Credit Beginning Balance 21,000 Beginning Balance. b. d. 185,000 C. 63,000 230,000 d. 90,000 390,000 0. 54,000 770,000 a 76,000 Ending Balance 56,000 h. 102,000 Ending Balance 390,000 5,000 Finished Goods. Advertising Expense Beginning Balance Ending Balance Debit Debit Beginning Balance Ending Balance Beginning Balance Ending Balance Finished Goods 60,000 770,000 30,000 Advertising Expense Credit Debit Credit Beginning Balance 136,000 800,000 k Ending Balance 136,000 Accumulated Depreciation Utilities Expense Credit Debit Credit Beginning Balance 95,000 g 95,000 Ending Balance Accounts Payable Debit Credit 7,000 7,000 Salaries Expense Debit Credit Beginning Balance 200,000 a. 70,000 c 54,000 e 136,000. d. 110,000 Ending Balance 110,000 120,000 h. 580,000 Debit Depreciation Expense Salaries & Wages Payable) Credit Debit Credit ces Ending Balance Debit Beginning Balance. g Ending Balance Beginning Balance Depreciation Expense. 19,000 19,000 wwwww 54,000 e 136,000 120,000 ha 580,000 Ending Balance 110,000 Salaries & Wages Payable. Credit Debit Credit Beginning Balance - Rent Expense Debit Credit. 18,000 Ending Balance 18,000 Ending Balance 430,000 d. 430,000 Chec Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 4B Req 5 Prepare an income statement for the year. Sales Cost of goods sold Gross margin Froya Fabrikker A/S Income Statement For the Year Ended $ 1,200,000 800,000 400,000 Selling and administrative expenses: Utilities expense Advertising expenses Salaries expense Depreciation expense Rent expense Wages payable Accounts payable Net operating income $ 70,000 x 136,000 110,000 316,000 $ 84,000 < Req 4B Req 5>