x DACC121TentativeSchedu X(MInbox (43)-ktoureO2@? I https://newconnect.mheducati

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x DACC121TentativeSchedu X(MInbox (43)-ktoureO2@? I https://newconnect.mheducation.com/flow/connect.html ?(MGant organization tour/X Connect ework Help Save & Exit Check m oya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment fot use in North Sea oll 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 $350,000 of manufacturing overhead for an estimated allocation base of 1,000 direct labor-hours. The following transactions took place during the year. a. Raw materials purchased on account, $250,000. b. Raw materials used in production (all direct materials), $235,000. c Utility bills incurred on account, S69000 (90% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: Direct labor (1,075 hours) Indirect labor Selling and administrative salaries S 280,000 $ 180,8ee 5 160,0e e. Maintenance costs incurred on account in the factory, $64.000 f. Advertising costs incurred on account, $146,000 g. Depreciation was recorded for the year, $82,000 (75% related to factory equipment, and the remainder related to selling and administrative equipment). h Rental cost incurred on account, $107,000 (80% related to factory facilities, and the remainder related to selling and administrative facilities). i Manufacturing overhead cost was applied to jobs, $2 i Cost of nonds man?fartured for the vear SR70000 K Prev4 of 4 Next

Explanation / Answer

1 Journal entries to record the preceding transactions Event General Journal Debit Credit a Raw materials A/c $250000       To Accounts payables $250000 b Work in process $235000       To Raw materials $235000 c manuafcturing overhead ($69000*0.90 $62100 Selling & Adminstrative Expenses $6900            To Accounts payables $69000 d Work In process $280,000 manufacturing overhead $100,000 Selling & Adminstrative Expenses $160,000         To Salaries & Wages Payable $540000 e manuafcturing overhead $64000            To Accounts payables $64000 f Advertising Expenses $146000            To Accounts payables $146000 g manuafcturing overhead ($82000*75% $61500 Depreciation Expenses $20500          To Accumulated Depreciation $82000 h manufacturing Overhead ($107,000*0.80 $85600 Rental expenses $21400            To Accounts payables $107000 i Work In process (350,000/1000) *1075 $376250          To manuafcturing overhead $376250 J Fnished Goods inventory $870,000           To Work in process $870,000 K (i) Accounts receivables A/c $1700,000          To Sales $1700,000 K (ii) Cost of goods sold $900,000         To Finished goods $900,000 2 Posting Entries to T - Accounts Accounts Receivables Sales A/c Cost of Goods sold particulars Debit particulars Credit particulars Debit particulars Credit particulars Debit particulars Credit To Sales 1700000 By Accounts receivables 1700000 To Selling Epxneses 6900 By manufacturing over head 3050 To Cost of goods Sold 1251750 To Salaries & Wages 160000 By balnce 1700000 To Accumulated Depreciation 20500 By Sales 1251750 Total 1700000 Total 1700000 To profit & Loss 448250 To Account payabes Rent 21400 To Finished Goods 900000 1700000 1700000 To Advetisment 146000 1254800 1254800 Raw materials Manufacturing over head Work In Process particulars Debit particulars Credit particulars Debit particulars Credit particulars Debit particulars Credit To balance 40000 To Account payables   Utilities 62100 By Work In process 376250 To Balance 31000 To Account payables 250000 by Work in process 235000 To Salaries & Wages 100000 To Raw materials 235000 By balance 55000 To Account payables 64000 To Salaries & Wages 280000 Total 290000 Total 290000 To Accumulated depreciation' 61500 To manufacturing Over head 376250 By Finished goods 870000 To Accounts payables 85600 By balance 52250 To Cost of goods sold 3050 Total 922250 Total 922250 Total 376250 Total 376250 Finished Goods Advertising Expenses particulars Debit particulars Credit particulars Debit particulars Credit To balance 70000 To Accounts Payable 146000 by Cost of Goods Sold 146000 To Work In process 870000 By Cost of goods sold 900000 By balance 40000 146000 146000 Total 940000 Total 940000 Accounts payable particulars Debit particulars Credit By Raw materials 2,50,000 by manufacturing Overhead 62100 by Selling Expenses 6900 by manufacturing Overhead 64000 By Advertising Expenses 146000 by manufacturing Overhead Rent 85600 By rental Expenses 21400 By Balance 6,36,000 Total 636000 Total 6,36,000 Accumulated Depreciation expenses Salaries & Wages particulars Debit particulars Credit particulars Debit particulars Credit depreciation 82000 By manufactuing Overhead 61500 To Account payables 540000 by Work In process 280000 By Depreciation Expenses 20500 By Selling Expenses 160000 By manufacturing Overhead 100000 Total 82000 Total 82000 Total 540000 Total 540000 (3) Cost of Goods manufactured Amount in $ Amount in $ materials Used' beginning inventory 40000 raw materilas Purchased 250000 Less: Ending Inventory -55000 235000 Direct Labour Cost 280000 Over head cost over head cost applied 376250 Total manufactuing Costs 891250 Add: beginning Work in process 31000 less: Ending Work In process -52250 Cost of Goods manufactured 870000 (4a) Journal Entry to close any balance in manufacturinh Over head Account to Cost of goods sold overhead over applied debit Credit manufacturing over head 3050       To Cost of goods sold 3050 (Being over applied has been Closed ) (4b) Cost of goods sold Amount in $ Beginning Finished doods inventory 70000 Add: Goods manufactured 870000 Less: Ending Finished Goods -40000 Cost of goods sold 900000 (5) Income Statement for the year Amount in $ Amount in $ Sales 1700000 less: Cost goods sold -900000 Gross profit 800000 Add: other income overhead Over applied 3050 803050 less: Operating Expneses Selling Epxneses 6900 Salaries & Wages 160000 Depreciation Expenses 20500 Rent 21400 Advetisment Expennse 146000 -354800 Net income 448250

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