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