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 $380,000 of manufacturing overhead for an estimated allocation base of 1,000 direct labor-hours. The following transactions took place during the year:

1. Raw materials purchased on account, $275,000.
2. Raw materials used in production (all direct materials), $260,000.
3. Utility bills incurred on account, $74,000 (95% related to factory operations, and the remainder related to selling and administrative activities).
4. Accrued salary and wage costs:

Direct labor (1,100 hours)	$	305,000
Indirect labor	$	105,000
Selling and administrative salaries	$	185,000

5. Maintenance costs incurred on account in the factory, $69,000
6. Advertising costs incurred on account, $151,000.
7. Depreciation was recorded for the year, $87,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment).
8. Rental cost incurred on account, $112,000 (85% related to factory facilities, and the remainder related to selling and administrative facilities).
9. Manufacturing overhead cost was applied to jobs, $ ? .
10. Cost of goods manufactured for the year, $920,000.
11. Sales for the year (all on account) totaled $1,950,000. These goods cost $950,000 according to their job cost sheets.

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

Raw Materials	$	45,000
Work in Process	$	36,000
Finished Goods	$	75,000

1. Journal Entries

In the books of Froya Fabrikker A/S:

Transaction / Event	General Journal	Debit	Credit
		$	$
a.	Raw Materials Inventory	275,000
	Accounts Payable		275,000
b.	Work in Process Inventory	260,000
	Raw Materials Inventory		260,000
c.	Manufacturing Overhead	70,300
	Utilities Expense	3,700
	Accounts Payable		74,000
d.	Work in Process Inventory	305,000
	Manufacturing Overhead	105,000
	Salaries Expense	185,000
	Salaries and Wages Payable		595,000
e.	Manufacturing Overhead	69,000
	Accounts Payable		69,000
f.	Advertising Expense	151,000
	Accounts Payable		151,000
g.	Manufacturing Overhead	69,600
	Depreciation Expense	17,400
	Accumulated Depreciation : Equipment		87,000
h.	Manufacturing Overhead	95,200
	Rent Expense	16,800
	Accounts Payable		112,000
i.	Work in Process Inventory ( $ 380,000 / 1,000 x 1,100)	418,000
	Manufacturing Overhead		418,000
j.	Finished Goods Inventory	920,000
	Work in Process Inventory		920,000
k.	Accounts Receivable	1,950,000
	Sales		1,950,000
	Cost of Goods Sold	950,000
	Finished Goods Inventory		950,000

Required:

1. Prepare journal entries to record the preceding transactions. COMPLETED ABOVE

HELP PLEASE WITH 2 AND 3

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.

Answer 1

Froya Fabrikker xlsx - Excel (Product Activation Failed) ? - ox Sign in FILE FORMULAS DATA REVIEW VIEW AA Copy 2 AutoSumA , == = = 5. HOME INSERT PAGE LAYOUT Cut Calibri - 11 Format Painter BIU Cipboard Font : x fit D [ I G H EX Bad Calculation Good Check Cell Paste D Normal Conditional Format as Neutral Formatting Table A Wrap Text + Merge & Center - Alignment General $ % ) Number = Insert Delete Format Sort Find B Filter - Select- Editing Styles Cells M47 L I J K M N O P Q R S T U V W X Y Z Credit Accounting titles & Explanations Raw materials inventory Accounts payable Debit 275,000 275,000 260,000 work in process inventory Raw materials inventory 260,000 manufacturing overhead utility expense Accounts payable 70300 3700 74,000 work in process inventory Manufacturing overhead Salary expense Salary & wages payable 305,000 105,000 185,000 595,000 69,000 Manufacturing overhead Accounts payable 69,000 151,000 Advertising expense Accounts payable 151,000 Manufacturing overhead Depreciation expense Accumulated depreciation 69600 17400 87,000 Manufacturing overhead Rent expense Accounts payable 95200 16800 112,000 Sheet1 READY EU-I Type here to search o B e w 9C e x2 AING 1039 AM 2/1/2020

? - ox Sign in Α Α Ε Χ ΕΙ Σ Autnum Α Copy 5. Froya Fabrikker xlsx - Excel (Product Activation Failed) FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW Cut Calibri - 11 AA == Wrap Text General D Normal Paste Fomat painter BIL A = = = Merge & Center. $ % Conditional Format as Neutral Formatting Table Cipboard Font Alignment Number M47 : X fire D [I GLIJ K L M N O P Q Bad Calculation Good Check Cell Insert Delete Format Sort Find B Filter - Select- Editing Styles Cells R S T U V W X Y Z Manufacturing overhead Rent expense Accounts payable 95200 16800 112,000 418,000 Work in process inventory Manufacturing overhead 418,000 920,000 finished goods inventory Work in process inventory 920,000 1,950,000 Accounts receivable Sales 1,950,000 950,000 cost of goods sold finished goods inventory 950,000 Accounts receivable Berbal 1,950,000 Sales Beg.bal 1,950,000 k end bal 1,950,000 1,950,000 end bal Raw Materials Beg Bal 45,000 275,000 cost of goods sold Beg.Bal 950,000 260,000 h. End bal 60,000 End bal 950,000 Sheet1 READY Type here to search o e 10:41 AM wic e x] ENG

Froya Fabrikker xlsx - Excel (Product Activation Failed) ? - ox Sign in REVIEW VIEW Copy Wrap Text Merge & Center - 2 AutoSumA , Bad Calculation H EX General $ % ) Number D Normal Conditional Format as Neutral Formatting Table Good Check Cell . Insert Delete Format Sort Find B Filter - Select- Editing Alignment Styles Cells 5. FILE HOME INSERT PAGE LAYOUT FORMULAS DATA Cut Calibri - 11 AA == Paste ce Format Painter B IU A = = = Cipboard Fom M47 : X fit 2D [ G L I Work in process Beg Bal 36,000 260,000 920,000 305,000 418000 J O P Q R S T U V W X Y Z _ K L M N Manufacturing overhead Beg.Bal 70300 118,000 i 105,000 69,000 69600 95200 8,900 End bal Advertising expense Bog.bal 151,000 end bal 99,000 finished goods Bee bal 75,000 920,000 950,000 k End bal 15,000 end bal 151,000 Accumulated Depreciation beg. bal 87,000 5 Utilities expense Beg bal 3700 End bal 87,000 end bal 3,700 Accounts payable Beg.bal Salaries expense Beg.Bal 185,000 275,000 a. 74,000 C. 69,000 e. 151,000 t. 112,000 h. 690,000 end bel end bal 185,000 Sheet1 6 READY Type here to search o e wic e x] 1042 AM AENG 21/2020

Froya Fabrikker xlsx - Excel (Product Activation Failed) ? - ox Sign in FORMULAS DATA REVIEW VIEW Copy 2 AutoSumA , AA A 5. FILE HOME INSERT PAGE LAYOUT Cut Calibri - 11 Paste ce Format Painter B IU Cipboard Font M47 : fir 2D [ G == = = Wrap Text Merge & Center - H EX Bad Calculation D Normal Conditional Format as Neutral Formatting Table Good Check Cell General $ % ) Number = . Insert Delete Format Sort Find B Filter - Select- Editing Alignment Styles Cells L I J K L M N O P Q R S T U V W X Y Z _ Salaries & wages payable Berbal Depreciation expense Beg.bal 17400 End bal 17,400 595,000 d. 595,000 end bal rent expense beg bal 16800 16,800 Endbal overhead applied - 380,000/1000*1100- 118000 Schedule of Cost of Goods Manufactured Direct Materials: Beginning raw materials inventory Add purchase of raw materials Total raw materials available less:Ending raw materials inventory Materials used in production Direct Labor Manufacturing overhead applied to work in process total manufacturing costs Add:Beginning work in process inventory 45,000 275,000 320,000 60,000 260,000 305,000 118000 983,000 36,000 1,019,000 99,000 920,000 113 114 less:Ending work in process inventory Cost of goods manufactured 115 Sheet1 READY Type here to search o e wic e x] 1042 AM AENG 21/2020

Froya Fabrikker xlsx - Excel (Product Activation Failed) ? - ox Sign in FILE FORMULAS DATA REVIEW VIEW AA Copy 2 AutoSumA , == = = Wrap Text Merge & Center - 5. HOME INSERT PAGE LAYOUT Cut Calibri - 11 Format Painter BIU Cipboard Fom : X fi D [ I G H EX Bad Calculation D Normal Conditional Format as Neutral Formatting Table Good Check Cell Paste A General $ % ) Number = + Insert Delete Format Sort Find B Filter - Select- Editing Alignment Styles Cells M47 L I J K M N O P Q R S T U V W X Y Z No TR Credit Debit 8,900 1 General lournal manufacturing overhead cost of goods sold 1 8,900 Schedule of Cost of goods sold Beginning finished Foods inventory Add:Cost of goods manufactured Cost of gnads available for sale less:ending finished goods inventory Unadjusted cost of goods sold less.overapplied overhead Adjusted cost of goods sold 75,000 920,000 995,000 45,000 950,000 8.900 941,100 1,950,000 941,100 1,008,900 Income statement Sales cost of goods sold Gross margin Selling and administrative expense Utilities expense Advertising expense Salaries expense Depreciation expense rent expense 3700 151,000 185,000 17,400 16800 141 373,900 635,000 Net operating income 142 143 Sheet1 READY Type here to search one wice x] - AENG 10:44 AM