Question

Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oi

e. Maintenance costs incurred on account in the factory, $70,000 f. Advertising costs incurred on account, $152,000. g. DepreGeneral Journal Credit No 1 Transaction a. Debit 280,000 Raw materials Accounts payable 280,000 2 b. Work in process 265,000

0 0
Add a comment Improve this question Transcribed image text
Answer #1

1.

Prepare journal entries as follows:

Trn. General Journal Debit Credit
a Raw material inventory $280,000
Accounts payable $280,000
b WIP inventory $265,000
Raw material inventory $265,000
c Manufacturing overhead ($75000 × 80%) $60,000
Utility expenses $15,000
Accounts payable $75,000
d WIP inventory $310,000
Manufacturing overhead $106,000
Salaries expenses $190,000
Wages payable $606,000
e Manufacturing overhead $70,000
Accounts payable $70,000
f Advertisement expense $152,000
Accounts payable $152,000
g Manufacturing overhead ($88000 × 85%) $74,800
Depreciation expense $13,200
Accumulated depreciation $88,000
h Manufacturing overhead ($113000 × 90%) $101,700
Rent expense $11,300
Accounts payable $113,000
i WIP inventory $418,000
Manufacturing overhead $418,000
[($399000/1050 direct labor hours) × 1100 hours]
j Finished goods inventory $930,000
WIP inventory $930,000
k Accounts receivable $2,000,000
Sales $2,000,000
k.1 COGS $960,000
Finished goods inventory $960,000

__________________________________________________________________

2.

Post your entries to T-accounts as follows:

Raw material Inventory
Beg. Bal. $46,000 b $265,000
a $280,000
End. Bal. $61,000
WIP inventory
Beg. Bal. $37,000 j $930,000
b $265,000
d $310,000
i $418,000
End. Bal. $100,000
Accounts payable
a $280,000
c $75,000
e $70,000
f $152,000
h $113,000
End. Bal. $690,000
Manufacturing overhead
c $60,000 i $418,000
d $106,000
e $70,000
g $74,800
h $101,700
End. Bal. $5,500
Finished goods inventory
Beg. Bal. $76,000 k.1 $960,000
j $930,000
End. Bal. $46,000
COGS
k.1 $960,000
End. Bal. $960,000
Sales
k $2,000,000
End. Bal. $2,000,000
Utility expense
c $15,000
End. Bal. $15,000
Advertisement expense
f $152,000
End. Bal. $152,000
Salaries expense
d $190,000
End. Bal. $190,000
Rent expense
h $11,300
End. Bal. $11,300
Depreciation expense
g $13,200
End. Bal. $13,200
Accumulated Depreciation
g $88,000
End. Bal. $88,000
Accounts receivable
k $2,000,000
End. Bal. $2,000,000
Wages payable
d $606,000
End. Bal. $606,000

_____________________________________________________________

3.

Prepare a schedule of cost of goods manufactured

Direct Material: Amount
Raw material inventory, Beginning $46,000
Add: Purchase of raw material $280,000
Raw material available $326,000
Less: Raw material inventory, Ending ($61,000)
Raw material used in production $265,000
Direct labor $310,000
Manufacturing overhead applied to WIP $418,000
Total manufacturing cost $993,000
Add: WIP inventory, beginning $37,000
Less: WIP Inventory, Ending ($100,000)
Cost of good manufactured $930,000

_________________________________________________________________________

4.A

Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold

General Journal Debit Credit
Manufacturing overhead $5,500
Cost of goods sold $5,500

_________________________________________________________________________

4.B

Prepare a schedule of cost of goods sold

Finished goods inventory, Beginning $76,000
Add: Cost of goods manufactured $930,000
Cost of goods available for sale $1,006,000
Less: Finished goods inventory, Ending ($46,000)
Unadjusted COGS $960,000
Less: overapplied overhead ($5,500)
Adjusted COGS $954,500

______________________________________________________________________

5.

Prepare an income statement for the year.

Income Statement
Sales $2,000,000
Less: COGS ($954,500)
Gross margin $1,045,500
Selling and admin. Expense:
Utility expense $15,000
Salary expense $190,000
Depreciation expense $13,200
Rent expense $11,300 $229,500
Net Income $816,000
Add a comment
Know the answer?
Add Answer to:
Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for...

    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 $399,000 of manufacturing overhead for an estimated allocation base of 1,050 direct labor-hours. The following transactions took place during the year: Raw materials purchased on account,...

  • Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for...

    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 $399,000 of manufacturing overhead for an estimated allocation base of 1,050 direct labor-hours. The following transactions took place during the year: Raw materials purchased on account,...

  • Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for...

    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 $399,000 of manufacturing overhead for an estimated allocation base of 1,050 direct labor-hours. The following transactions took place during the year: Raw materials purchased on account,...

  • Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for...

    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 $399,000 of manufacturing overhead for an estimated allocation base of 1,050 direct labor-hours. The following transactions took place during the year. a. Raw materials purchased...

  • Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for...

    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 $399,000 of manufacturing overhead for an estimated allocation base of 1,050 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased...

  • Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for...

    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 $350,000 of manufacturing overhead for an estimated allocation base of 1,000 direct labor-hours. The following transactions took place during the year: Raw materials purchased on account,...

  • Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for...

    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 $374,000 of manufacturing overhead for an estimated allocation base of 1,100 direct labor-hours. The following transactions took place during the year: Raw materials purchased on account,...

  • Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for...

    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,...

  • Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for...

    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: Raw materials purchased on account,...

  • Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in...

    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 a. Raw materials purchased...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT