Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sesot 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 $336,000 of manufacturing overhead for an estimated allocation base of 1050 direct labor-hours. The following transactions took place during the year a. Raw materials purchased on account, $225.000 b. Raw materials used in production (all direct materials) $210,000 Utility bills incurred on account. $58,000 (95% related to factory operations, and the remainder related to selling and administrative activities) d Accrued salary and wage costs Direct labor (1.125 hours) Indirect labor Selling and administrative salaries $ 255,000 395,000 $ 135.000 . Maintenance costs incurred on account in the factory, $59,000 Advertising costs incurred on account. $141.000 9 Depreciation was recorded for the year. $89.000 (70% related to factory equipment, and the remainder related to selling and Rental cost incurred on account $114.000 (75% related to factory facilities, and the remainder related to selling and administrative facilities) Manufacturing overhead cost was applied to jobs. $_2 Cost of goods manufactured for the year $820.000 Sales for the year (all on account totaled $1,450,000. These goods cost $850.000 according to their job cost sheets The balances in the inventory accounts at the beginning of the year were: Raw Materials York in Process Finished Goods $ 35,000 $ 26,000 $ 65,000 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. 4B. Prepare a schedule of cost of goods sold. 5. Prepare an income statement for the year
Reg 1 Reg 2 Reg 3 Reg 4 Reg 48 Reg 5 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 Cost of Goods Sold Beg Bal Raw Materials 35,000 225,000 210.000 Beg Bal a ik 850,000 End Bal 850,000 End. Bal 50,000 Manufacturing Overhead Beg Bal Beg Bal b fa Work in Process 26,000 210,000 820,000 255,000 360,000 360,000 d e 55,100 95.000 59,000 62 300 85,500 19 m End. Bal 31,000 End Bal 3,100
Advertising Expense Beg Bal Finished Goods 65,000 820,000 850,000 Beg Bal End. Bal End. Bal 35,000 Accumulated Depreciation Utilities Expense Beg Bal Beg Bal End Bal End Bal Accounts Payable Salaries Expense Beg Bal Beg Bal End. Bal End Bal
Depreciation Expense Salaries & Wages Payable Beg Bal Beg Bal - End Bal End Bal. Rent Expense Beg Bal End. Bal