Homework Help is Here – Start Your Trial Now!
Business
Accounting
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.

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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

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 $342,000 of manufacturing overhead for an estimated allocation base of 950 direct labor-hours. The following transactions took place during the year:

 

  1. Raw materials purchased on account, $210,000.
  2. Raw materials used in production (all direct materials), $195,000.
  3. Utility bills incurred on account, $61,000 (95% related to factory operations, and the remainder related to selling and administrative activities).
  4. Accrued salary and wage costs:

 

Direct labor (1,025 hours) $ 240,000
Indirect labor $ 92,000
Selling and administrative salaries $ 120,000

 

  1. Maintenance costs incurred on account in the factory, $56,000
  2. Advertising costs incurred on account, $138,000.
  3. Depreciation was recorded for the year, $86,000 (75% related to factory equipment, and the remainder related to selling and administrative equipment).
  4. Rental cost incurred on account, $111,000 (80% related to factory facilities, and the remainder related to selling and administrative facilities).
  5. Manufacturing overhead cost was applied to jobs, $ ? .
  6. Cost of goods manufactured for the year, $790,000.
  7. Sales for the year (all on account) totaled $1,300,000. These goods cost $820,000 according to their job cost sheets.

 

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

 

Raw Materials $ 32,000
Work in Process $ 23,000
Finished Goods $ 62,000

 

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.

Beginning Balance Ending Balance Ending Balance Debit Beginning Balance Ending Balance Debit Beginning Balance Ending Balance Debit Debit Beginning Balance Accumulated Depreciation Accounts Payable Depreciation Expense Rent Expense Credit Credit Credit Credit Beginning Balance Ending Balance Debit Ending Balance Beginning Balance Debit Ending Balance Debit Beginning Balance Utilities Expense Salaries Expense Salaries & Wages Payable Credit Credit Credit
Transcribed Image Text:Beginning Balance Ending Balance Ending Balance Debit Beginning Balance Ending Balance Debit Beginning Balance Ending Balance Debit Debit Beginning Balance Accumulated Depreciation Accounts Payable Depreciation Expense Rent Expense Credit Credit Credit Credit Beginning Balance Ending Balance Debit Ending Balance Beginning Balance Debit Ending Balance Debit Beginning Balance Utilities Expense Salaries Expense Salaries & Wages Payable Credit Credit Credit
Beginning Balance Ending Balance Debit Ending Balance Beginning Balance Debit Ending Balance Debit Beginning Balance Debit Beginning Balance Accounts Receivable Raw Materials Work in Process Finished Goods Credit Credit Credit Credit Beginning Balance Ending Balance Debit Ending Balance Beginning Balance Debit Ending Balance Debit Beginning Balance Debit Beginning Balance Sales Cost of Goods Sold Manufacturing Overhead Advertising Expense Credit Credit Credit Credit
Transcribed Image Text:Beginning Balance Ending Balance Debit Ending Balance Beginning Balance Debit Ending Balance Debit Beginning Balance Debit Beginning Balance Accounts Receivable Raw Materials Work in Process Finished Goods Credit Credit Credit Credit Beginning Balance Ending Balance Debit Ending Balance Beginning Balance Debit Ending Balance Debit Beginning Balance Debit Beginning Balance Sales Cost of Goods Sold Manufacturing Overhead Advertising Expense Credit Credit Credit Credit
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 7 steps with 9 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Cost Sheet
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS