Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Return to Problem 3-15 Journal Entries; T-Accounts; Financial Statements [LO3-1, LO3-2, L03-3, LO3-4) Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures

image text in transcribed
image text in transcribed
Return to Problem 3-15 Journal Entries; T-Accounts; Financial Statements [LO3-1, LO3-2, L03-3, 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 $373,700 of manufacturing overhead for an estimated allocation base of 1,010 direct labor-hours. The following transactions took place during the year. a. Raw materials purchased on account, $255,000 b. Raw materials used in production (all direct materials) $240,000. c. Utility bills incurred on account, $70,000 (95% related to factory operations, and the remainder related to selling and administrative activities) d. Accrued salary and wage costs: Direct labor (1,685 hours) Indirect labor Selling and administrative salaries $285,000 $ 101,000 $ 165,000 e. Maintenance costs incurred on account in the factory, $65,000 f. Advertising costs incurred on account. $147,000. 9. Depreciation was recorded for the year, $83,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $108,000 (85% related to factory facilities, and the remainder related to selling and administrative facilities) 1. Manufacturing overhead cost was applied to jobs, $_? j. Cost of goods manufactured for the year. $880,000 k. Sales for the year (all on account) totaled $1,750,000. These goods cost $910,000 according to their job cost sheets. k. Sales for the year (all on account) totaled $1,750,000. These goods cost $910,000 according to their job The balances in the inventory accounts at the beginning of the year were: Raw Materials Work in Process Finished Goods $ 41,000 $ 32,000 $ 71,000 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 Solo 4B. Prepare a schedule of cost of goods sold. 5. Prepare an income statement for the year

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Establishing A CGMP Laboratory Audit System A Practical Guide

Authors: David M. Bliesner

1st Edition

0471738409, 978-0471738404

More Books

Students also viewed these Accounting questions

Question

LO 6-7 How to do basic usability testing on your documents

Answered: 1 week ago