Question

a. Raw materials purchased on account, $290,000. . Raw materials used in production (all direct materials). $275,000. . Utility bills incurred on account, $77,000 (90% related to factory operations, and the remainder related to selling and administrative activities). . Accrued salary and wage costs: Direct labor (970 hours) Indirect labor Selling and administrative salaries $320,000 $ 108,000 $200,000 2. Maintenance costs incurred on account in the factory, $72,000 f. Advertising costs incurred on account, $154,000. ). Depreciation was recorded for the year, $90,000 (75% related to factory equipment, and the remainder related to selling and administrative equipment). 1. Rental cost incurred on account, $115,000 (80% 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, $950,000. Sales for the year (all on account) totaled $2,100,000. These goods cost $980,000 according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were: Raw Materials $48,000 Work in Process $39,000 Finished Goods $78,000 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. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Req 4A Req 4B Req 5 Prepare a schedule of cost of goods manufactured. Froya Fabrikker A/S Schedule of Cost of Goods Manufactured Beginning work in process inventory Direct materials: Beginning raw materials inventory Add: Purchases of raw materials Total raw materials available Less: Ending raw materials inventory SOOS Direct materials used in production Direct labor Manufacturing overhead applied to work in process Total manufacturing costs added to production Total manufacturing costs to account for Less: Ending work in process inventory Cost of goods manufactured 0

Answer 1

Credit Sales Requirement (1) No Transaction General Journal 1 (a) Raw Materials Accounts Payable Debit $ 290,000 Requirement (2) Accounts Receivable Beg Bal. $ 2,100,000 Beg Bal. $ 290,000 $ 2,100,000 (k) 2 (b) $ 275,000 End Bal. Work in process Raw Materials $2,100,000 End Bal. $2,100,000 $ 275,000 3 (c) Manufacturing overhead Utilities Expense Accounts Payable 69,300 7,700 $ Raw Materials Beg Bal. $ 48,000 (a) $ 290,000 $275,000 (b) Cost of goods sold Beg Bal. $ (k) $ 980,000 $ 77,000 4 (d) $ $ 320,000 108,000 End Bal. $ 63,000 Work in process Manufacturing overhead Salaries Expense Salaries and wages payable End Bal. $980,000 200,000 $ 628,000 Manufacturing Overhead 5 (e) $ 72,000 Manufacturing overhead Accounts payable Beg Bal. (b) (d) 0 Work In Process $ 39,000 $ 275,000 $950,000 6) $ 320,000 $ 417,100 $ 72,000 Beg Bal. (c) (d) (e) (9) $ 69,300 $ 417,100 6 $ 108,000 $ 72,000 $ 67,500 $ 92,000 6 () $ 154,000 Advertising Expense Accounts payable $ 154,000 $ 101, 100 7 (g) Manufacturing overhead Depreciation Expense Accumulated Depreciation 67,500 22,500 8,300 $ $ 90,000 Advertising Expense Finished Goods Beg Bal. $ 78,000 6) $ 950,000 $980,000 (k) Beg Bal. 8 E $ 154,000 Manufacturing overhead Rent Expense Accounts Payable $ $ 92,000 23,000 $ 115,000 End Bal. $ 48,000 End Bal. $154,000 9 0 $ 417,100 Utilities Expense Work in process Manufacturing overhead Accumulated Depreciation $ 90,000 (9) $ 417,100 Beg Bal Beg Bal c) $ 7,700 10 6) $ Finished goods Work in process 950,000 $ 950,000 End Bal. $ 90,000 End Bal. $ 7,700 11 (k1) Accounts Receivable Sales $ 2,100,000 Accounts Payable Salaries Expense $ 2,100,000 Beg Bal. Beg Bal. (d) $200,000 12 (K2) Cost of goods sold Finished goods $ 980,000 $ 980,000 $ 290,000 (a) $ 77,000 (c) $ 72,000 (e) $ 154,000 () $ 115,000 (h) End Bal. $ 200,000 Salaries and Wages Payable End Bal. $ 708,000 Beg Bal. $ 628,000 (d) Depreciation Expense $ 628,000 Beg Bal. (9) $ 22,500 Rent Expense End Bal. $ 22,500 Beg Bal. $ 23,000 End Bal $ 23,000

Requirement 4(a) No 1 Transaction General Journal Debit Credt 1 Manufacturing Overhead $ 8,300 Cost of goods sold $ 8,300 Requirement (3) Froya Fabrikker A/s Schedule of cost of goods manufactured Drect materials: Raw materials inventory, Beginning $ 48,000 Add : Purchase of Raw materials $ 290,000 Materials avalable for use $ 338,000 Less : Raw materials inventory, Ending $ 63,000 Materials used in production Direct labour Manufacturing overhead applied to work in process Total manufacturing overhead Add : Work in process, Beginning Requirement (5) Froya Fabricker A/S Income Statement For the Year Ended Sales Cost of goods sold Gross Margin Seling and administrative expense Utilities Expense $ 7,700 Advertising Expense $ 154,000 Salaries Expense $ 200,000 Depreciation Expense $ 22,500 Rent Expense $ 23,000 Total Seling and administrative expense $ 2,100,000 $ 971,700 $ 1,128,300 $ 275,000 $ 320,000 $ 417,100 $ 1,012,100 $ 39,000 $ 1,051, 100 $ 101,100 $ 950,000 $ 407,200 Less : Work in process, Ending Cost of goods manufactured Net Income $ 721,100 Requirement 46) Froya Fabrikker A/S Schedule of cost of goods sold Finished goods inventory,Beginning Add: Cost of goods manufactured Goods available for sale Less : Finished goods inventory, Ending Unadjusted cost of goods sold Less; Overappled overhead Adjusted Cost of goods sold $ 78,000 $ 950,000 $1,028,000 $ 48,000 $ 980,000 $ 8,300 $ 971,700