CHAPTER 5 Exercise 5, 6, 7 Problem 1 Exercise 5 (Cost of goods manufactured and sold) Schedule of Cost of Goods Manufactured For the year ended December 31, 20X1 Direct material used P87,000 Direct manufacturing labor costs 34,000 Indirect manufacturing costs: Property tax on plant building P3,000 Plant utilities 17,000 Depreciation of plant building Depreciation of plant equipment 9,000 11,000 Plant repairs and maintenance 16,000 Indirect manufacturing labor costs 23,000 Indirect materials used 11,000 Miscellaneous plant overhead 4,000 94,000 Manufacturing costs incurred during 20X1 Add beginning work in process inventory, Jan. 1, 20X1 215,000 20,000 Total manufacturing costs to account for 235,000 Deduct ending work in process inventory, December 31, 20X1 26,000 Cost of goods manufactured P209,000 Schedule of Cost of Goods Sold For the year ended December 31, 20X1 Beginning finished goods, Jan. 1, 20X1 P27,000 Cost of goods manufactured (above) 209,000 Cost of goods available for sale 236,000 Ending finished goods, Dec. 31, 20X1 Cost of goods sold 34,000 202,000 Exercise 6 (Cost of goods manufactured) Requirement 1 Conseco Company Schedule of Cost of Goods Manufactured For the year ended December 31, 20X1 Direct material costs: Beginning inventory, Jan. 1, 20X Purchases of direct materials Cost of direct materials available for use Ending inventory, December 31, 20X1 Direct materials used Direct manufacturing labor costs Indirect manufacturing Costs: Indirect manufacturing labor costs Plant insurance Depreciation-plant building and equipment P22,000 75,000 97,000 26,000 P71,000 25,000 P15,000 9,000 11,000 Repairs and maintenance – plant Manufacturing costs incurred during 20X1 Add beginning work in process inventory, Jan. 1, 20X1 Total manufacturing costs to account for Deducting ending work in process inventory, De. 31, 20X1 Cost of goods manufactured 4,000 39,000 135,000 21,000 156,000 20,000 P236,000 Requirement 2 Conseco Company Schedule of Cost of Goods Sold For the year ended December 31, 20X1 Revenues Cost of goods sold: Beginning finished goods, Jan. 1, 20X1 Cost of goods manufactured (Requirement 1) Cost of goods available for sale Ending finished goods, Dec. 31, 20X1 Gross margin Operating costs: Marketing, distribution, and customer service General and administrative Operating income P300,000 P18,000 136,000 154,000 23,000 P93,000 29,000 131,000 169,000 122,000 P47,000 Exercise 7 (Finding unknown balances) Case 1 Revenues Case 2 P32,000 P 31,800 A 20,700 20,000 Gross margin 11,300 C P11,800 Direct materials used P8,000 P12,000 Direct manufacturing labor costs 3,000 5,000 Indirect manufacturing costs 7,000 D 6,500 Manufacturing cost incurred 18,000 23,500 0 800 18,000 24,300 0 3,000 18,000 21,300 Cost of goods sold Add Beginning work in process, 1/1 Total manufacturing costs to account for Deduct ending work in process, 12/31 Cost of goods manufactured Beginning finished goods, inventory 1/1 P4,000 4,000 Cost of goods manufactured 18,000 21,300 Cost of goods available for sale 22,000 25,300 Ending finished goods inventory, 12/31 B 1,300 5,300 Cost of goods sold P20,700 P20,000 Problem 1 (Flow of an accounting for the manufacturing company) Requirement 1 Barton Manufacturing Corporation 1. 2. 3. 4a. 4b. 5. 6. 7. Direct materials inventory Accounts payable Work in process inventory Accounts payable (for labor) Equipment Accounts payable Manufacturing overhead Accounts payable Work in process inventory Manufacturing overhead Work in process inventory Direct materials inventory (P80,000 × 70%) Finished goods inventory Work in process inventory (P114,000 = 60% × [P42,000 + P92,000 + P56,000]) Cost of goods sold Finished goods inventory (P102,600 = 90% × P114,000) Requirement 2 Direct Materials Inventory 1 80,000 56,000 5 24,000 6 7 3 80,000 80,000 42,000 42,000 67,200 67,200 92,000 92,000 92,000 92,000 56,000 56,000 114,000 114,000 102,600 102,600 Work in Process Inventory 2 42,000 4b 92,000 114,000 5 56,000 76,000 Finished Goods Inventory 114,000 102,600 11,400 Accounts Payable 80,000 1 42,000 2 67,200 3 92,000 4a Manufacturing Overhead 4a 92,000 92,000 4b Cost of Goods Sold 102,600 Equipment 62,200 Requirement 3 Barton Manufacturing Corporation Statement of Cost of Goods Manufactured and Sold for the Year Ended December 31 Beginning work in process, 1/1 Manufacturing costs: Direct materials: Beginning inventory, 1/1 Add purchases Direct materials available Less ending inventory, 12/31 Direct materials put into process Direct labor Manufacturing overhead Total manufacturing costs Total costs of work in process during the year Less work in process, 12/31 Cost of goods manufactured during the year Beginning of goods, 1/1 Finished goods in inventory available for sale Less ending finished goods inventory, 12/31 Cost of goods sold P 0 P 0 80,000 80,000 24,000 P56,000 42,000 92,000 190,000 190,000 76,000 114,000 _____0 114,000 11,400 P102,600