Question

Problem 3-15 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 manufacturing overhead cost to jobs on the basis of direct labor-hours. Its predetermined overhead rate was based on a cost formula that estimated $351,500 of manufacturing overhead for an estimated allocation base of 950 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased on account, $215,000. b. Raw materials used in production (all direct materials), $200,000. c. Utility bills incurred on account, $62,000 (85% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: Direct labor (1,025 hours) Indirect labor Selling and administrative salaries $245,000 $ 93,000 $125,000 e. Maintenance costs incurred on account in the factory, $57,000 f. Advertising costs incurred on account, $139,000. g. Depreciation was recorded for the year, $87,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $112,000 (85% related to factory facilities, and the remainder related to selling and administrative facilities). i. Manufacturing overhead cost was applied to jobs, $ ? . j. Cost of goods manufactured for the year, $800,000. k. Sales for the year (all on account) totaled $1,350,000. These goods cost $830,000 according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were: Raw Materials $33,000 Work in $24,000 Process Finished $63,000 Goods 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.

Answer 1

Froya Fabrikker xlsx - Excel (Product Activation Failed) ? FILE 5. HOME Xcut REVIEW VIEW INSERT PAGE LAYOUT Calibri - 11 - ox Sign in Α FORMULAS DATA AA == A' = = = > Α Ε Χ La Copy ΕΙ Σ Autnum Α Paste D Normal Conditional Format as Neutral Formatting Table Bad Calculation Good Check Cell Number $ % Number I Wrap Text * Merge & Center - Alignment U Insert Delete Format Sort & Find Filter - Select- Editing Styles Cells G90 Format Painter B Cipboard X D [ Font fir G -689 L I I J K L M N O P Q R S T U V W X Y Z Credit Accounting titles & Explanations Raw materials inventory Accounts payable Debit 215,000 215,000 work in process inventory Raw materials inventory 200,000 200,000 manufacturing overhead utility expense Accounts payable 52700 9300 62,000 work in process inventory Manufacturing overhead Salary expense Salary & wages payable 2415,000 93,000 125,000 463,000 57,000 Manufacturing overhead Accounts payable 57,000 139,000 Advertising expense Accounts payable 139,000 Manufacturing overhead Depreciation expense Accumulated depreciation 69600 17400 87,000 Manufacturing overhead Rent expense Accounts payable 95200 16800 112,000 Sheet1 READY 6:18 PM Type here to search o B e w c. ENG 9C e x2 2/10/2020

Froya Fabrikker xlsx - Excel (Product Activation Failed) ? REVIEW VIEW - ox Sign in Α Α Ε Χ ΕΙ Σ Autnum Α Copy 5. FILE HOME INSERT PAGE LAYOUT FORMULAS DATA Cut Calibri - 11 AA == Paste Format Painter B I U A' = = = Cipboard Font G90 X fir -689 2D [ G L I Number $ % Number Wrap Text * Merge & Center - Alignment D Normal Conditional Format as Neutral Formatting Table Bad Calculation Good Check Cell Insert Delete Format Sort & Find Filter - Select- Editing Styles Cells J K L M N O P Q R S T U V W X Y Z A Manufacturing overhead Rent expense Accounts payable 95200 16800 112,000 379,250 Work in process inventory Manufacturing overhead 379,250 800,000 finished goods inventory Work in process inventory 800,000 1,350,000 Accounts receivable Sales 1,350,000 830,000 cost of goods sold finished goods inventory 830,000 Accounts receivable Berbal 1,350,000 Sales Beg.bal 1,350,000 k. end tal 1,350,000 1,350,000 end bal Raw Materials Bog.Bal 33.000 215,000 cost of goods sold Beg.Bal 830,000 200,000 h. End bal 48,000 End bal 830,000 Sheet1 READY Type here to search o Be w Ce x] A ENG 6:19 PM 7/19/2020

Froya Fabrikker xlsx - Excel (Product Activation Failed) ? - ox Sign in FILE REVIEW VIEW Copy 2 AutoSumA , H EX Bad Calculation Wrap Text * Merge & Center - Alignment Number $ % Number D Normal Conditional Format as Neutral Formatting Table Good Check Cell Paste Insert Delete Format Sort Find B Filter - Select- Editing Styles Cells G90 5. HOME INSERT PAGE LAYOUT FORMULAS DATA Cut Calibri - 11 AA == Format Painter B I U A' = = = Cipboard Fom X fir -689 D [ G L I Work in process Beg Bal 24,000 200,000 800,000 245,000 379250 O P Q R S T U V W X Y Z K L M N Manufacturing overhead Beg.Bal 52700 379,250 i 93,000 57,000 69600 95200 11,750 End bal Advertising expense Beg.bal 139,000 end bal 48,250 finished goods Bee bal 63,000 800,000 830,000 k End bal 33,000 end bel 139,000 Accumulated Depreciation beg. bal 87,000 5 Utilities expense Beg bal 9300 End bal 87,000 end bal 9,300 Accounts payable Beg.bal Salaries expense Beg. Bal 125,000 215,000 a. 62,000 C. 57,000 e. 139,000 f. 112,000 h. 690,000 end bel end bal 125,000 Sheet1 6 READY Type here to search o e wic e x] EN ENG 6:20 PM 2/10/2020

Froya Fabrikker xlsx - Excel (Product Activation Failed) ? - ox Sign in REVIEW VIEW Copy 2 AutoSumA , Wrap Text Merge & Center - 5. FILE HOME INSERT PAGE LAYOUT FORMULAS DATA Cut Calibri - 11 AA == Paste Format Painter B I U A' = = = Cipboard Font G90 X fir -689 2D [ G L I H EX D Normal Conditional Format as Neutral Formatting Table Bad Calculation Number $ % Number Good Check Cell * Insert Delete Format Sort Find B Filter - Select- Editing Alignment Styles Cells J K L M N O P Q R S T U V W X Y Z _ Depreciation expense Bep.bal 17400 Endbal 17,400 Salaries & wages payable Berbal 463,000 d. end bal 463,000 rent expense beg bal 16800 16,800 Endbal overhead applied - 351500/950 1025- 379250 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 productiuni Direct Labor Manufacturing overhead applied to work in process total manufacturing costs Add:Beginning work in process inventory 33,000 215,000 248,000 48,000 200,000 215,000 379250 824,250 24,000 848,250 18.250 800,000 112 113 less:Ending work in process inventory Cost of goods manufactured 114 Sheet1 READY Type here to search o B e w 9C e x] A ENG 620 PM 7/10/2020

Froya Fabrikker xlsx - Excel (Product Activation Failed) ? - ox Sign in FILE REVIEW VIEW I X Auto Sum-AY ! Copy 5. HOME INSERT PAGE LAYOUT FORMULAS DATA Cut Calibri - 11 AA == Format Painter BIL A == = Cipboard Font X fir -629 D [ I G L I Wrap Text Merge & Center Paste Number $ % Number D Normal Conditional Format as Neutral Formatting Table Bad Calculation Good Check Cell * Insert Delete Format Sort Find B Filter - Select- Editing Alignment Styles Cells G90 J K L M N O P Q R S T U V W X Y Z NO T R 1 1 General ioural manufacturing overhead cost of goods sold Debit Credit 11,750 11,750 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 63,000 800,000 863,000 33,000 830,000 11,750 818,250 1,350,000 818,250 531,750 Income statement Sales cost of goods sold Gross margin Selling and administrative expense Utilities expense Advertising expense Salaries expense Depreciation expense rent expense 9300 139.000 125,000 17,400 16800 141 307,500 221,250 Net operating income 142 143 Sheet1 READY - o B Type here to search e C w 20 PM 9C e x] A ENG 7/10/2020