3. Prepare a schedule of cost of goods manufactured (see picture below for reference). 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.
Problem 3-15 (Algo) Journal Entries; T-Accounts; Financial Statements [LO3-1, LO3-2, LO3-3, 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
- Raw materials purchased on account, $295,000.
- Raw materials used in production (all direct materials), $280,000.
- Utility bills incurred on account, $78,000 (95% related to factory operations, and the remainder related to selling and administrative activities).
- Accrued salary and wage costs:
| Direct labor (890 hours) | $ 325,000 |
|---|---|
| Indirect labor | $ 109,000 |
| Selling and administrative salaries | $ 205,000 |
- Maintenance costs incurred on account in the factory, $73,000
- Advertising costs incurred on account, $155,000.
Depreciation was recorded for the year, $91,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment).- Rental cost incurred on account, $105,000 (85% related to factory facilities, and the remainder related to selling and administrative facilities).
- Manufacturing overhead cost was applied to jobs, $ ? .
- Cost of goods manufactured for the year, $960,000.
- Sales for the year (all on account) totaled $2,150,000. These goods cost $990,000 according to their
job cost sheets.
The balances in the inventory accounts at the beginning of the year were:
| Raw Materials | $ 49,000 |
|---|---|
| Work in Process | $ 40,000 |
| Finished Goods | $ 79,000 |
Required:
3. Prepare a schedule of cost of goods manufactured (see picture below for reference).
4A. Prepare a
4B. Prepare a schedule of cost of goods sold.
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