Please HELP ME. please include all journal entries and t accounts. thanks. Froya

Question

Please HELP ME. please include all journal entries and t accounts. thanks.

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 $372,000 of manufacturing overhead for an estimated allocation base of 1,200 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased on account, $240,000. b. Raw materials used in production (all direct materials), $225,000 C. Utility bills incurred on account, $67,000 (95% related to factory operations, and the remainder related to selling and administrative activities) d. Accrued salary and wage costs: Direct labor (1,275 hours) Indirect labor $ 270,000 $98,000 $ 150,00e Selling and administrative salaries e. Maintenance costs incurred on account in the factory, $62,000 f. Advertising costs incurred on account, $144,000 g. Depreciation was recorded for the year, $80,000 (85% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $105,000 (90% related to factory facilities, and the remainder related to selling and administrative

Explanation / Answer

Accounting titles & Explanations Debit Credit a) Raw materials inventory 240,000 Accounts payable 240,000 b) work in process inventory 225,000 Raw materials inventory 225,000 c) manufacturing overhead 63650 utility expense 3350 Accounts payable 67,000 d) work in process inventory 270,000 Manufacturing overhead 98,000 Salary expense 150,000 Salary & wages payable 518,000 e) Manufacturing overhead 62,000 Accounts payable 62,000 f) Advertising expense 144,000 Accounts payable 144,000 g) Manufacturing overhead 68000 Depreciation expense 12000 Accumulated depreciation 80,000 h) Manufacturing overhead 94500 Rent expense 10500 Accounts payable 105,000 i) Work in process inventory 395,250 Manufacturing overhead 395,250 j) finished goods inventory 850,000 Work in process inventory 850,000 k) Accounts receivable 1,600,000 sales 1,600,000 cost of goods sold 880,000 finished goods inventory 880,000 Accounts receivable Sales Beg.bal Beg.bal k. 1,600,000 1,600,000 k. end bal 1,600,000 1,600,000 end bal Raw Materials cost of goods sold Beg.Bal 38,000 Beg.Bal a. 240,000 225,000 b. k. 880,000 End bal 53,000 End bal 880,000 Work in process Manufacturing overhead Beg Bal 29,000 Beg.Bal b. 225,000 850,000 j c. 63650 395,250 i d. 270,000 d. 98,000 i. 395250 e. 62,000 g. 68000 end bal 69,250 h. 94500 9,100 End bal finished goods Advertising expense Beg bal 68,000 Beg.bal j 850,000 880,000 k f. 144,000 End bal 38,000 end bal 144,000 Accumulated Depreciation Utilities expense beg.bal Beg bal g. 80,000 g. c. 3350 End bal 80,000 end bal 3,350 Accounts payable Salaries expense Beg.bal Beg.Bal 240,000 a. d. 150,000 67,000 c. 62,000 e. 144,000 f. 105,000 h. End bal 618,000 end bal 155,000 Depreciation expense Salaries & wages payable Beg.bal Beg.bal g. 12000 518,000 d. End bal 12,000 end bal 518,000 rent expense beg bal h. 10500 End bal 10,500 Schedule of Cost of Goods Manufactured Direct Materials: Beginning raw materials inventory 38,000 Add:purchase of raw materials 240,000 Total raw materials available 278,000 less:Ending raw materials inventory 53,000 Materials used in production 225,000 Direct Labor 270,000 Manufacturing overhead applied to work in process 395250 total manufacturing costs 890,250 Add:Beginning work in process inventory 29,000 919,250 less:Ending work in process inventory 69,250 Cost of goods manufactured 850,000     Schedule of Cost of goods sold Beginning finished goods inventory 68,000 Add:Cost of goods manufactured 850,000 Cost of goods available for sale 918,000 less:ending finished goods inventory 38,000 Unadjusted cost of goods sold 880,000 less:overapplied overhead 9,100 Adjusted cost of goods sold 870,900 Income statement Sales 1,600,000 cost of goods sold 870,900 Gross margin 729,100 Selling and administrative expense Utilities expense 3350 Advertising expense 144,000 Salaries expense 150,000 Depreciation expense 12,000 rent expense 10500 319,850 Net operating income 409,250

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