Question

4a 4b and 5 not answered... thank you

signment Print View Page 1 Award: 5.00 points Froya Faber 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 predeterm Overhead rate was based on a cost formula that estimated $350,000 of manufacturing overhead for an estimated allocation base of 1000 G labor-hours. The following transactions took place during the year: Raw materials purchased on account $250.000 b. Raw materials used in production (all direct materials), 3235,000 c Utility bills incurred on account. 369,000 (90% related to factory operations, and the remainder related to selling and administrative acth d. Accrued salary and wage costs Direct labor (1.075 hours) Indirect labor Selling and administrative salaries $ 280,000 $ 100,000 $ 180.000 . Maintenance costs incurred on account in the factory, 564,000 f. Advertising costs incurred on account, $140,000 0. Depreciation was recorded for the year, 582,000 (75% related to factory equipment, and the remainder related to selling and adminis equipment h Rental cost incurred on account. $107.000 (80% related to factory facilities, and the remainder related to selling and administrative Manufacturing overhead cost was applied to jobs, S_? Cost of goods manufactured for the year. $870,000. K Sales for the year (all on account) totaled $1,700,000. These goods cost $900,000 according to their job cost sheets. - The balances in the inventory accounts at the beginning of the year were: Raw Materials Work in Process Finished Goods $ 40,000 $31.000 $ 70,000 Required: 1. Prepare journal entries to record the preceding transactions 2. Post your entries to Taccounts. (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 48. Prepare a schedule of cost of goods sold 5. Prepare an income statement for the year

Answer 1

Compute Predetermined overhead rate = $350,000/1000 direct labor hours = $350

1.

Prepare journal entries as follows:

Trn. No	Account Titles	Debit	Credit
a	Raw material inventory	$250,000
	Accounts payable		$250,000
b	Work in process inventory	$235,000
	Raw material inventory		$235,000
c	Manufacturing overhead	$62,100
	Utility expenses	$6,900
	Accounts payable		$69,000
d	Work in process inventory	$280,000
	Manufacturing overhead	$100,000
	Salaries expenses	$160,000
	Wages payable		$540,000
e	Manufacturing overhead	$64,000
	Accounts payable		$64,000
f	Advertisement expenses	$146,000
	Accounts payable		$146,000
g	Manufacturing overhead	$61,500
	Depreciation expenses	$20,500
	Accumulated depreciation		$82,000
h	Manufacturing overhead	$85,600
	Rent expenses	$21,400
	Accounts payable		$107,000
i	Work in process inventory ($350 × 1075 hours)	$376,250
	Manufacturing overhead		$376,250
j	Finished good inventory	$870,000
	Work in process inventory		$870,000
k	Accounts receivable	$1,700,000
	Sale		$1,700,000
	COGS	$900,000
	Finished good inventory		$900,000

_____________________________________________________________________

2.

Prepare t-accounts as follows:

Raw material inventory $40,000 6 $250,000 COGS $900,000 Beg. Bal. S235,000 $900,000 End. Bal $55,000 Utility expense $6.900 Beg. Bal. $ 870,000 Work in process inventory $31,000 li S235,000 $280,000 $376,250 $6,900 Advertisement expense S146,000 End. Bal $52,250 $146,000 Accounts payable Salaries expense $160,000 $250,000 $69,000 $64,000 $146,000 $107.000 $160,000 Rent expense $21,400 End. bal $636,000 End. Bal. $21,400

Finished good inventory $70,000 k $870,000 Depreciation expense $20,500 Beg. Bal. $900,000 End. Bal. 20,500 E nd. Bal $40,000 Accounts receivable $1,700,000 $376,250 End. Bal. $1,700,000 Manufacturing overhead $62,100 $100,000 $64,000 $61,500 $85,600 End. Bal. $3,050

Wages payable $540,000 End. Bal. $540,000 Accumulted Depreciation $82,000 End. Bal. $82,000 Sales $1,700,000 End. Bal. $1,700,000

_____________________________________________________________

3.

Prepare a schedule of Cost of goods manufactured as follows:

Direct material:
Raw material inventory: Beginning	$40,000
Add: Purchase of raw material	$250,000
Raw material available	$290,000
Less: Raw material ending inventory	($55,000)
Raw material used in production	$235,000
Direct labor	$280,000
Manufacturing overhead applied to WIP	$376,250
Total manufacturing cost	$891,250
Add: Beginning WIP inventory	$31,000
Less: Ending WIP inventory	($52,250)
Cost of Goods manufactured	$870,000