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 $351,000 of manufacturing overhead for an estimated allocation base of 900 direct labor-hours. The following transactions took place during the year: Raw materials purchased on account, $265,000. Raw materials used in production (all direct materials), $250,000. Utility bills incurred on account, $72,000 (85% related to factory operations, and the remainder related to selling and administrative activities). Accrued salary and wage costs: Direct labor (980 hours) $ 295,000 Indirect labor $ 103,000 Selling and administrative salaries $ 175,000 Maintenance costs incurred on account in the factory, $67,000 Advertising costs incurred on account, $149,000. Depreciation was recorded for the year, $85,000 (70% related to factory equipment, and the remainder related to selling and administrative equipment). Rental cost incurred on account, $110,000 (75% 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, $900,000. Sales for the year (all on account) totaled $1,850,000. These goods cost $930,000 according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were: Raw Materials $ 43,000 Work in Process $ 34,000 Finished Goods $ 73,000 1. Prepare journal entries to record the preceding transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No Transaction General Journal Debit Credit 1 a. Raw materials 265,000 Accounts payable 265,000 2 b. Work in process 250,000 Raw materials 250,000 3 c. Manufacturing overhead 61,200 Utilities expense 10,800 Accounts payable 72,000 4 d. Work in process 295,000 Manufacturing overhead 103,000 Salaries expense 175,000 Salaries and wages payable 573,000 5 e. Manufacturing overhead 67,000 Accounts payable 67,000 6 f. Advertising expense 149,000 Accounts payable 149,000 7 g. Manufacturing overhead 59,500 Depreciation expense 25,500 Accumulated depreciation 85,000 8 h. Manufacturing overhead 82,500 Rent expense 27,500 Accounts payable 110,000 9 i. Work in process 382,200 Manufacturing overhead 382,200 10 j. Finished goods 900,000 Work in process 900,000 11 k(1). Accounts receivable 1,850,000 Sales 1,850,000 12 k(2). Cost of goods sold 930,000 Finished goods 930,000 2. Post your entries to T-accounts. (Don’t forget to enter the beginning inventory balances above.) The format for this is in the image attached and please also include the corresponding letters .

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 $351,000 of manufacturing overhead for an estimated allocation base of 900 direct labor-hours. The following transactions took place during the year: Raw materials purchased on account, $265,000. Raw materials used in production (all direct materials), $250,000. Utility bills incurred on account, $72,000 (85% related to factory operations, and the remainder related to selling and administrative activities). Accrued salary and wage costs: Direct labor (980 hours) $ 295,000 Indirect labor $ 103,000 Selling and administrative salaries $ 175,000 Maintenance costs incurred on account in the factory, $67,000 Advertising costs incurred on account, $149,000. Depreciation was recorded for the year, $85,000 (70% related to factory equipment, and the remainder related to selling and administrative equipment). Rental cost incurred on account, $110,000 (75% 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, $900,000. Sales for the year (all on account) totaled $1,850,000. These goods cost $930,000 according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were: Raw Materials $ 43,000 Work in Process $ 34,000 Finished Goods $ 73,000 1. Prepare journal entries to record the preceding transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No Transaction General Journal Debit Credit 1 a. Raw materials 265,000 Accounts payable 265,000 2 b. Work in process 250,000 Raw materials 250,000 3 c. Manufacturing overhead 61,200 Utilities expense 10,800 Accounts payable 72,000 4 d. Work in process 295,000 Manufacturing overhead 103,000 Salaries expense 175,000 Salaries and wages payable 573,000 5 e. Manufacturing overhead 67,000 Accounts payable 67,000 6 f. Advertising expense 149,000 Accounts payable 149,000 7 g. Manufacturing overhead 59,500 Depreciation expense 25,500 Accumulated depreciation 85,000 8 h. Manufacturing overhead 82,500 Rent expense 27,500 Accounts payable 110,000 9 i. Work in process 382,200 Manufacturing overhead 382,200 10 j. Finished goods 900,000 Work in process 900,000 11 k(1). Accounts receivable 1,850,000 Sales 1,850,000 12 k(2). Cost of goods sold 930,000 Finished goods 930,000 2. Post your entries to T-accounts. (Don’t forget to enter the beginning inventory balances above.) The format for this is in the image attached and please also include the corresponding letters .

Name: Froya Fabrikker A/S of Bergen, Norway, is a small company that manufac
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Description: 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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Raw materials purchased on account, $265,000.
Raw materials used in production (all direct materials), $250,000.
Utility bills incurred on account, $72,000 (85% related to factory operations, and the remainder related to selling and administrative activities).
Accrued salary and wage costs:


Direct labor (980 hours)	$	295,000
Indirect labor	$	103,000
Selling and administrative salaries	$	175,000

Maintenance costs incurred on account in the factory, $67,000
Advertising costs incurred on account, $149,000.
Depreciation was recorded for the year, $85,000 (70% related to factory equipment, and the remainder related to selling and administrative equipment).
Rental cost incurred on account, $110,000 (75% 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, $900,000.
Sales for the year (all on account) totaled $1,850,000. These goods cost $930,000 according to their job cost sheets.

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


Raw Materials	$	43,000
Work in Process	$	34,000
Finished Goods	$	73,000

1. Prepare journal entries to record the preceding transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

No	Transaction	General Journal	Debit	Credit
1	a.	Raw materials	265,000
		Accounts payable		265,000

2	b.	Work in process	250,000
		Raw materials		250,000

3	c.	Manufacturing overhead	61,200
		Utilities expense	10,800
		Accounts payable		72,000

4	d.	Work in process	295,000
		Manufacturing overhead	103,000
		Salaries expense	175,000
		Salaries and wages payable		573,000

5	e.	Manufacturing overhead	67,000
		Accounts payable		67,000

6	f.	Advertising expense	149,000
		Accounts payable		149,000

7	g.	Manufacturing overhead	59,500
		Depreciation expense	25,500
		Accumulated depreciation		85,000

8	h.	Manufacturing overhead	82,500
		Rent expense	27,500
		Accounts payable		110,000

9	i.	Work in process	382,200
		Manufacturing overhead		382,200

10	j.	Finished goods	900,000
		Work in process		900,000

11	k(1).	Accounts receivable	1,850,000
		Sales		1,850,000

12	k(2).	Cost of goods sold	930,000
		Finished goods		930,000

2. Post your entries to T-accounts. (Don’t forget to enter the beginning inventory balances above.) The format for this is in the image attached and please also include the corresponding letters .

Accounts Receivable
Sales
Beg. Bal.
Beg. Bal.
k.
1,850,000
End. Bal.
1,850,000
End. Bal.
Raw Materials
Cost of Goods Sold
Beg. Bal.
Beg. Bal.
End. Bal.
End. Bal.
Work in Process
Manufacturing Overhead
Beg. Bal.
Beg. Bal.
End. Bal.
End. Bal.
Finished Goods
Advertising Expense
Beg. Bal.
Beg. Bal.

Accumulated Depreciation
Utilities Expense
Beg. Bal.
Beg. Bal.
End. Bal.
End. Bal.
Accounts Payable
Salaries Expense
Вeg. Bal.
Вeg. Bal.
End. Bal.
End. Bal.
Depreciation Expense
Salaries & Wages Payable
Beg. Bal.
Beg. Bal.
End. Bal.
End. Bal.
Rent Expense
Вeg. Bal.
End. Bal.

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