Froya Fabrikker A/S of Bergen,Norway,is a small company

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 $360000 of manufacturing overhead for an estimated allocation base of 900 direct labor-hours. The following transactions took place during the year:

a) Raw Materials purchased on account,$2,00,000.

b) Raw Materials used in production (all direct materials), $185000.

c) Utility bills incurred on account,$70,000 (90% related to factory operations, and remainder related to selling and administrative activities).

d) Accrued salary and wage costs:-

Direct labor(975 hours)...................................................$230,000

Indirect Labor.................................................................. $ 90,000

Selling and Administrative salaries...................................$110000

e) Maintenance cost incurred on account in the factory,$54,000.

f) Advertisement cost incurred on account ,$136000.

g) Depreciation was recorded for the year,$95,000(80% related to factory equipment, and the remainder related to selling and administrative equipment).

h) Rental cost incurred on account ,$120000(85% related to factory facilities, and remainder related to selling and administrative facilities).

i) Manufacturing overhead cost was applied to jobs,$....?

j) Cost of goods manufactured for the year ,$770000.

k) Sales for the year (all on account) totaled $1,200,000.These goods cost $8,00,000 according to their job cost sheets.

The balances in the inventory accounts at the beginning of the year were:

Raw Materials ......$30000

Work in Process....$21,000

Finished Goods......$60,000

Required:

1) Prepare Journal Entries.

2) Prepare T-Accounts

3) Prepare a schedule of cost of goods manufactured.

4) Prepare journal entry to close any balance in the manufacturing overhead account to cost of goods sold. Prepare a schedule of cost of goods sold.

5) Prepare an an income statement for the year.