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SVETLANKA909090 [29]
3 years ago
5

Froya Fabrikker A/S of Bergen, Norway, Is a small company that manufactures specialty heavy equipment for use In North Sea oil f

ields. 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 $395,600 of manufacturing overhead for an estimated allocation base of 920 direct labor-hours. The following transactions took place during the year:a. Raw materials purchased on account, $290,000.b. Raw materials used In production (all direct materials), $275,000.c. Utility bills incurred on account, $77,000 (90% related to factory operations, and the remainder related to selling and administrative activities).d. Accrued salary and wage costs:Direct labor (970 hours) $320,000Indirect labor $108,000Selling and administrative salaries $200,000e. Maintenance costs incurred on account in the factory, $72,000.f. Advertising costs incurred on account, $154,000.g. Depreciation was recorded for the year, $90,000 (75% related to factory equipment, and the remainder related to selling and administrative equipment)h. Rental cost incurred on account, $115,000 (80% related to factory facilities, and the remainder related to selling and administrative facilities).i. Manufacturing overhead cost was applied to jobs, $ _____j. Cost of goods manufactured for the year, $950,000.k. Sales for the year (ail on account) totaled $2.100.000. These goods cost $980.000 according to their job cost sheets.The balances in the inventory accounts at the beginning of the year were:Raw Materials $48,000Work in Process $39,000Finished Goods $78,000Required:1. Prepare journal entries to record the preceding transactions.2. Post your entries to T-accounts. (Don't forget to enter the beginning Inventory balances above.)3. Prepare a schedule of cost of goods manufactured.4A. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.4B. Prepare a schedule of cost of goods sold. 5. Prepare an income statement for the year.

Business
1 answer:
Zinaida [17]3 years ago
3 0

Answer:

NOTE:

Missing Information:

d. Accrued salary and wage costs:

Direct labor (970 hours) $320,000

Indirect labor $108,000

Selling and administrative salaries $200,000

e. Maintenance costs incurred on account in the factory, $72,000.

f. Advertising costs incurred on account, $154,000.

g. Depreciation was recorded for the year, $90,000 (75% related to factory equipment, and the remainder related to selling and administrative equipment)

h. Rental cost incurred on account, $115,000 (80% related to factory facilities, and the remainder related to selling and administrative facilities).

i. Manufacturing overhead cost was applied to jobs, $ _____

j. Cost of goods manufactured for the year, $950,000.

k. Sales for the year (ail on account) totaled $2.100.000. These goods cost $980.000 according to their job cost sheets.

Answer:

Schedule of goods sold and income statement of the year.

a) raw materials 220,000 debit

        accounts payable    220,00 credit

b) WIP 205,000 debit

     raw materials  205,000 credit

c) factory overhead   56,700 debit

  utilities expense       6,300 debit

         utilities payable    63,000  credit

d) WIP 320,000 debit

  Factory overhead 108,000 debit

  salaries expense  200,000 debit  salaries and wages payables   628,000 credit

e) factory overhead   72,000 debit

                  cash 72,000 credit

f) advertizing expense 154,000 debit

                       cash 154,000 credit

g) factory overhead 67,500 debit

   depreciation expense  22,500 debit

  acc depreciation- equipment       90,000 credit

h) factory overhead    92,000 debit

  rent expense    23,000 debit

          cash      115,000 credit

i)   WIP (970 hours x $380 per DHL) = 368,600 debit 

 factory overhead      368,600 credit

j) finished goods 950,000 debit

         WIP   950,000 credit

k) account receivables 2,100,000 debit

 sales revenues  2,100,000 credit

   cost of goods sold  980,000 debit

  finished goods  980,000 credit

Explanation:

The attachment below shows the step-by-step explanation to the question

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Answer:

Income effect

Explanation:

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5 0
3 years ago
Biden Resorts Company currently has 0.2 million common shares of stock outstanding and the stock has a beta of 2.2. It also has
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Answer:

Hence, the weighted average cost of capital is 15.87%.

Explanation:

We have to find current weights,  

Value of equity = Shares x Share price = 0.2 x 10 = $2 million  

Face Value of Bonds FV = $1 million

Semi annual coupon P = 1 x 8% / 2 = $0.04 million

Number of coupons remaining n = 5 x 2 = 10

Semi annual yield r = 13.65% / 2 = 6.825%

Value of Debt = Px [1 - (1 + r)-n] / r + FV / (1 + r)n

= 0.04 x [1 - (1 + 0.06825)-10] / 0.06825 + 1 / (1 + 0.06825)10

= $0.8 million

Total Value = 2 + 0.8 = $2.8 million

Weight of Debt = 0.8 / 2.8 = 28.57%

Weight of Equity = 2 / 2.8 = 71.45%

Amount of Debt to be raised = Weight of debt x Capital

= 0.2857 x 7.5

= $2.14 million

Since the amount of debt to be raised is less than $2.5 million, the yield will be 13.65%  

Cost of Equity = Risk Free Rate + Beta x (Market Return - Risk Free Rate)

= 3% + 2.2 x (10 - 3)

= 18.4%

The weighted average cost of capital:-  

WACC = Weight of Debt x Cost of Debt x (1 -Tax Rate) + Weight of Equity x Cost of Equity

= 0.2857 x 13.65% x (1 - 0.3) + 0.7145 x 18.4%

= 15.87%

8 0
3 years ago
Mercury Inc. purchased equipment in 2019 at a cost of $497,000. The equipment was expected to produce 580,000 units over the nex
Ivan

Answer:

1.

Gain or (Loss) on sale = (17000)  Loss

2.

Cash                                                     253600 Dr

Accumulated Depreciation               226400 Dr

Loss on Sale                                        17000 Dr

         Equipment                                         497000 Cr

3.

Gain or (Loss) on sale = 9400 Gain

4.

Cash                                                    280000 Dr

Accumulated Depreciation              226400 Dr

         Gain on Sale                                      9400 Cr

         Equipment                                         497000 Cr

Explanation:

We first need to calculate the carrying value of the equipment at the date of disposal. The carrying value is calculated as follows,

Carrying value = Cost  -  Accumulated depreciation

Depreciation 2019  =  (497000 - 33000) * 83000 / 580000

Depreciation 2019  = 66400

Depreciation 2020  =  (497000 - 33000) * 133000 / 580000

Depreciation 2020  = 106400

Depreciation 2021  =  (497000 - 33000) * 67000 / 580000

Depreciation 2021  = 53600

Carrying value = 497000  -  [ 66400 + 106400 + 53600 ]

Carrying value = $270600

1.

Gain or (Loss) on sale = Sales price  -  Carrying Value

Gain or (Loss) on sale = 253600  -  270600

Gain or (Loss) on sale = (17000)  Loss

2.

Cash                                                     253600 Dr

Accumulated Depreciation                226400 Dr

Loss on Sale                                        17000 Dr

         Equipment                                         497000 Cr

3.

Gain or (Loss) on sale = Sales price  -  Carrying Value

Gain or (Loss) on sale = 280000  -  270600

Gain or (Loss) on sale = 9400 Gain

4.

Cash                                                    280000 Dr

Accumulated Depreciation                226400 Dr

         Gain on Sale                                      9400 Cr

         Equipment                                         497000 Cr

6 0
3 years ago
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atroni [7]
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5 0
3 years ago
Mosh, a sole proprietor, uses the cash basis of accounting. At the beginning of the current year, accounts receivable were $25,0
Dahasolnce [82]

Answer:

b. $100,000

Explanation:

Provided information

Beginning balance of account receivable = $25,000

Collection from customers = $100,000

Ending balance of account receivable = $15,000

Since we have to find out the gross taxable income, so we considered only the collection from customers as this is the amount which is received and therefore, it has come under the gross taxable income i.e $100,000.

8 0
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