Froya Fabrikker A/S ofBergen, Norway, is a small company that manufactures specialtyheavy equipment for...Froya...

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Froya Fabrikker A/S ofBergen, Norway, is a small company that manufactures specialtyheavy equipment for use in North Sea oil fields. The company uses ajob-order costing system that applies manufacturing overhead costto jobs on the basis of direct labor-hours. Its predeterminedoverhead rate was based on a cost formula that estimated $342,000of manufacturing overhead for an estimated allocation base of 950direct labor-hours. The following transactions took place duringthe year:
Raw materials purchased on account, $210,000.
Raw materials used in production (all direct materials),$195,000.
Utility bills incurred on account, $61,000 (95% related tofactory operations, and the remainder related to selling andadministrative activities).
Accrued salary and wage costs:
Direct labor(1,025 hours) $ 240,000
Indirectlabor $ 92,000
Selling andadministrative salaries $
120,000
Maintenance costs incurred on account in the factory,$56,000
Advertising costs incurred on account, $138,000.
Depreciation was recorded for the year, $86,000 (75% related tofactory equipment, and the remainder related to selling andadministrative equipment).
Rental cost incurred on account, $111,000 (80% related tofactory facilities, and the remainder related to selling andadministrative facilities).
Manufacturing overhead cost was applied to jobs, $???.
Cost of goods manufactured for the year, $790,000.
Sales for the year (all on account) totaled $1,300,000. Thesegoods cost $820,000 according to their job cost sheets.
The balances in theinventory accounts at the beginning of the year were:
RawMaterials $ 32,000
Work inProcess $ 23,000
FinishedGoods $ 62,000
Required:
1. Prepare journalentries to record the preceding transactions.
2. Post your entriesto T-accounts. (Don’t forget to enter the beginning inventorybalances above.)
3. Prepare a scheduleof cost of goods manufactured.
4A. Prepare a journalentry to close any balance in the Manufacturing Overhead account toCost of Goods Sold.
4B. Prepare a scheduleof cost of goods sold.
5. Prepare an incomestatement for the year.

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Accounting titles Explanations Debit Credit a Raw materials inventory 210000 Accounts payable 210000 b work in process inventory 195000 Raw materials inventory 195000 c manufacturing overhead 57950 utility expense 3050 Accounts payable 61000 d work in process inventory 240000 Manufacturing overhead 92000 Salary expense 120000 Salary wages payable 452000 e Manufacturing overhead 56000 Accounts payable 56000 f Advertising expense 138000 Accounts payable 138000 g Manufacturing overhead 64500 Depreciation expense 21500 Accumulated depreciation 86000 h See Answer

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In: AccountingFroya Fabrikker A/S ofBergen, Norway, is a small company that manufactures specialtyheavy equipment for...Froya Fabrikker A/S ofBergen, Norway, is a small company that manufactures specialtyheavy equipment for use in North Sea oil fields. The company uses ajob-order costing system that applies manufacturing overhead costto jobs on the basis of direct labor-hours. Its predeterminedoverhead rate was based on a cost formula that estimated $342,000of manufacturing overhead for an estimated allocation base of 950direct labor-hours. The following transactions took place duringthe year:Raw materials purchased on account, $210,000.Raw materials used in production (all direct materials),$195,000.Utility bills incurred on account, $61,000 (95% related tofactory operations, and the remainder related to selling andadministrative activities).Accrued salary and wage costs:Direct labor(1,025 hours)$240,000Indirectlabor$92,000Selling andadministrative salaries$120,000Maintenance costs incurred on account in the factory,$56,000Advertising costs incurred on account, $138,000.Depreciation was recorded for the year, $86,000 (75% related tofactory equipment, and the remainder related to selling andadministrative equipment).Rental cost incurred on account, $111,000 (80% related tofactory facilities, and the remainder related to selling andadministrative facilities).Manufacturing overhead cost was applied to jobs, $???.Cost of goods manufactured for the year, $790,000.Sales for the year (all on account) totaled $1,300,000. Thesegoods cost $820,000 according to their job cost sheets.The balances in theinventory accounts at the beginning of the year were:RawMaterials$32,000Work inProcess$23,000FinishedGoods$62,000Required:1. Prepare journalentries to record the preceding transactions.2. Post your entriesto T-accounts. (Don’t forget to enter the beginning inventorybalances above.)3. Prepare a scheduleof cost of goods manufactured.4A. Prepare a journalentry to close any balance in the Manufacturing Overhead account toCost of Goods Sold.4B. Prepare a scheduleof cost of goods sold.5. Prepare an incomestatement for the year.


Direct labor(1,025 hours)	$	240,000
Indirectlabor	$	92,000
Selling andadministrative salaries	$	120,000


RawMaterials	$	32,000
Work inProcess	$	23,000
FinishedGoods	$	62,000