Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales The company uses a job order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated 5105,000 of manufacturing overhead for an estimated activity level of $50,000 direct abor dollars. At the beginning of the year, the inventory balances were as follows: Raw materials Work in process Finished goods 5 10,600 $4,700 58,400 During the year, the following transactions were completed: a. Raw materials purchased on account. $163,000 b. Raw materials used in production, 5146.000 (materials costing 5128,000 were charged directly to jobs the remaining materials were indirect c Costs for employee services were incurred as follows: Direct labor Indirect labor Sales Coniston istrative salaries $164,000 $262.00 $21.000 $ 50.000 Che Advertising costs incurred on account, 146,000. 9. Depreciation was recorded for the year, 582,000 (75% related to factory equipment, and the remainder related to selling and administrative equipment) h. Rental cost incurred on account. S107000 (80% related to factory facilities, and the remainder related to selling and administrative facilities) 1. Manufacturing overhead cost was applied to jobs, S_ 1. Cost of goods manufactured for the year, 5870,000 k Sales for the year (all on account) totaled $1700,000. These goods cost $900.000 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 $ 40,000 $ 31,000 $ 70,000 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 48. 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. Post your entries to T-accounts. (Don't forget to enter the beginning inventory balances above.) Accounts Receivable Sales Beg Bal Beg Bal End. Bal End Bal Raw Materials Cost of Goods Sold Beg Bal Beg Bal End: Bal End Bal Work in Process Manufacturing Overhead Beg Ball Beg Bai End Bal Einished Goods Advertising Expenso Beg Bal Beg Bal End Bal End Ball Accumulated Depreciation Utilities Expense Beg Bal Beg Bal End Bal End Bal Accounts Payable Salarios Expense Beg Bal Beg Bal End. Bal Nort Beg Bal Beg Bal End Bal End Bal Salaries & Woges Payable Depreciation Expense 4 Beg Bal Beg Bal End Bal End. Bal Rent Expenso Beg Bal End Bal Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea o 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 $350,000 of manufacturing overhead for an estimated allocation base of 1,000 direct labor hours. The following transactions took place during the year. a. Raw materials purchased on account, $250,000 b. Raw materials used in production (all direct materials) $235.000 c. Utility bills incurred on account, $69,000 (90% related to factory operations, and the remainder related to selling and administrative activities) d Accrued salary and wage costs Direct labor (1,075 hours) Indirect lobor Selling and administrative salaries $ 280,000 $100,000 $ 160,000 e. Maintenance costs incurred on account in the factory $64,000 f Advertising costs incurred on account: $146.000 9 Depreciation was recorded for the year. $82,000 175% related to factory equipment and the remainder related to selling and administrative equipment) h Rental cost incurred on account $107.000 (80% related to factory facilities, and the remainder related to selling and administrative facilities) Manufacturing overhead cost was applied to lobs. $. ? e Maintenance costs incurred on account in the factory, $64,000 f Advertising costs incurred on account, $146,000. g. Depreciation was recorded for the year, $82,000 (75% related to factory equipment and the remainder related to selling and administrative equipment) h Rental cost incurred on account, S107,000 (80% related to factory facilities, and the remainder related to selling and administrative facilities) Manufacturing overhead cost was applied to jobs, $_? J. Cost of goods manufactured for the year. $870,000 k. Sales for the year (all on account) totaled $1700,000. These goods cost $900,000 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 $ 40,000 $ 31,000 $ 70,000 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 48 Prepare a schedule of cost of goods sold 5. Prepare an income statement for the year Post your entries to T-accounts. (Don't forget to enter the beginning inventory balances above.) Accounts Receivable Sales Beg Bal Beg Bal End. Bal End. Bal Raw Materials Cost of Goods Sold Beg Bal Beg Bal End B End Bal Work in Process Manufacturing Overhead Beg Bal Beg Bat
