Problem 3-26 Journal Entries; T-Accounts; Financial Statements [LO3-1, LO3-2, LO3-3, LO3-4, LO3-5, LO3-6, LO3-7]

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 and 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 $388,800 of manufacturing overhead for an estimated allocation base of 810 direct labor-hours. The following transactions took place during the year (all purchases and services were acquired on account):

a.	Raw materials purchased for use in production, $295,000.
b.	Raw materials requisitioned for use in production (all direct materials), $280,000.
c.	Utility bills were incurred, $78,000 (95% related to factory operations, and the remainder related to selling and administrative activities).
d.	Salary and wage costs were incurred:

Direct labor (890 hours)	$	325,000
Indirect labor	$	109,000
Selling and administrative salaries	$	205,000

e.	Maintenance costs were incurred in the factory, $73,000.
f.	Advertising costs were incurred, $155,000.
g.	Depreciation was recorded for the year, $91,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment).
h.	Rental cost incurred on buildings, $105,000 (85% related to factory operations, 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, $960,000.
k.	Sales for the year (all on account) totaled $2,150,000. These goods cost $990,000 according to their job cost sheets.

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

Raw materials

$

49,000

Work in process

$

40,000

Finished Goods

$

79,000

Required:

1.

Prepare journal entries to record the above data. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) ( I got up to letter i before getting stuck)

a.	Raw materials	295,000
	Accounts payable		295,000
b.	Work in process	280,000
	Raw materials		280,000
c.	Manufacturing overhead	74,100
	Utilities expense	3,900
	Accounts payable		78,000
d.	Work in process	325,000
	Manufacturing overhead	109,000
	Salaries expense	205,000
	Salaries and wages payable		639,000
e.	Manufacturing overhead	73,000
	Accounts payable		73,000
f.	Advertising expense	155,000
	Accounts payable		155,000
g.	Manufacturing overhead	72,800
	Depreciation expense	18,200
	Accumulated depreciation		91,000
h.	Manufacturing overhead	89,250
	Rent expense	15,750
	Accounts payable		105,000
i.	Work in process
	Manufacturing overhead

2. Post your entries to T-accounts. (Dont forget to enter the opening inventory balances above.) Determine the ending balances in the inventory accounts and in the Manufacturing Overhead account. (For Accounts Receivable, Sales, Raw Materials, Cost of Goods Sold, Work in Process, Manufacturing Overhead, Finished Goods, Advertising Exp, Accumulated Depreciation, utilities exp, accounts payable, salary expense, depreciation exp, salaries and wages payable, rent expense)

3.

Prepare a schedule of cost of goods manufactured.

4.	Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. Prepare a schedule of cost of goods sold. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

5.	Prepare an income statement for the year.

6.	Job 412 was one of the many jobs started and completed during the year. The job required $9,900 in direct materials and 35 hours of direct labor time at a total direct labor cost of $10,800. If the job contained six units and the company billed at 60% above the unit product cost on the job cost sheet, what price per unit would have been charged to the customer?