Problem $3-15($Statlc$)$ Journal Entrles; T$-$Accounts; FInanclal Statements $[$LO$3-1,$ LO$3-2,$ LO$3-3,$ LO$3-4]$

Froya Fabrikker A$/$S of Bergen, Norway, manufactures speclalty heavy equipment for use in North Sea oll fields. The company uses a job$-$order costing system that applies manufacturing overhead cost to jobs based on direct labor$-$hours. Its predetermined overhead rate was based on a cost formula that estimated $\backslash (\backslash$$ $360,000\backslash )$ of manufacturing overhead for an estimated allocation base of $900$ direct labor$-$hours. The following transactions occurred during the year:

a$.$ Raw materlals purchased on account, $\backslash (\backslash$$ $200,000\backslash ).$

b$.$ Raw materlals used in production $($all direct materlals$),\backslash (\backslash$$ $185,000\backslash )$

c$.$ Utility bills incurred on account, $\backslash (\backslash$$ $70,000\backslash )(\backslash (90\backslash \%\backslash )$ related to factory operations, and the remalnder related to selling and administrative actlvitles$).$

d$.$ Accrued salary and wage costs:

e$.$ Maintenance costs incurred on account in the factory, $\backslash (\backslash$$ $54,000\backslash ).$

f$.$ Advertising costs incurred on account, $\backslash (\backslash$$ $136,000\backslash )$

g$.$ Depreclation recorded for the year, $\backslash (\backslash$$ $95,000\backslash )(\backslash (80\backslash \%\backslash )$ related to factory equipment, and the remalnder related to selling and administratlve equipment$).$

h$.$ Rental cost incurred on account, $\backslash (\backslash$$ $120,000\backslash )(\backslash (85\backslash \%\backslash )$ related to factory facilities, and the remainder related to selling and administrative facilities$).$

I. Manufacturing overhead cost applied to Jobs, $\backslash$$ $?$

J$.$ Cost of goods manufactured, $\backslash (\backslash$$ $770,000\backslash ).$

k$.$ Sales $($all on account$)$ totaled $\backslash (\backslash$$ $1,200,000\backslash ).$ These goods cost $\backslash (\backslash$$ $800,000\backslash )$ according to thelr job cost sheets.

The beginning balances in the Inventory accounts were:

Required:

$1.$ Prepare journal entrles to record the preceding transactions.

$2$ Post your entrles to T$-$accounts. $($Don$\text{'}$t forget to enter the beginning Inventory balances above.$)$

$3.$ Prepare a schedule of cost of goods manufactured.

$4$A$.$ Prepare a journal entry to close any balance In the Manufacturing Overhead account to Cost of Goods Sold.

$4$B$.$ Prepare a schedule of cost of goods sold.

$5.$ Prepare an income statement.