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PROBLEM 3-31 Journal Entries; T-Accounts; Comprehensive Problem; Financial Statements; L04, LO5, LO6, LO7, LO8] Froya Fabrikker A/S of Bergen. Norway, is a small company that manufactures specialty equipment for use in North Sea oil fields. (The Norwegian hementy Systems Design: Job-Order Costing by Nkr.) The company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of direct labor-hours. At the beginning of the year, the following estimates were made for the purpose of computing the predetermined overhead rate: manufacturing overhead cost, Nkr 360,000 ; and direct labor-hours, 900. The following transactions took place during the year (all purchases and services were acquired on account): a. Raw materials were purchased for use in production, Nkr200,000. b. Raw materials were requisitioned for use in production (all direct materials), Nkr185,000. c. Utility bills were incurred, Nkr70,000 ( 90% related to factory operations, and the remainder related to selling and administrative activities). d. Salary and wage costs were incurred: e. Maintenance costs were incurred in the factory, Nkr54,000. f. Advertising costs were incurred, Nkr136,000. g. Depreciation was recorded for the year, Nkr 95,000 ( 80% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on buildings, Nkr120,000 ( 85% related to factory operations, and the remainder related to selling and administrative facilities). i. Manufacturing overhead cost was applied to jobs, Nkr ? j. Cost of goods manufactured for the year, Nkr770,000. k. Sales for the year (all on account) totaled Nkr1,200,000. These goods cost Nkr800,000 according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were: show equations for assets (Materials/DirectMaterials, WIP, FG; read carefully whether the company has a "Materials" vs "Direct Materials" asset, - show T-accounts for MOHC, MOHA, S\&A, and COGS, - show ONE journal entry - close MOHC, MOHA, and adjust COGS, - show an Income Statement that has an "adjusted COGS", - is the allocated OH over- or under-allocated

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