Cost Accounting
Problem A
JYD Company reported the following inventory balances as of October 31, 2019:
Raw Materials
P 80,000
Work in Process
110,000
Finished Goods
190,000
The following transactions occurred during the month of November 2016:
1. Purchased P25,000 of raw materials on account.
Raw materials
account payable
25 000
25 000
2. Issued P18,000 of raw materials to production of which P15,000 were direct to the product.
Work in Process inventory
Factory overhead
Raw materials
15 000
3 000
18 000
3. Factory payroll of P34,000 was accrued and distributed as follows: P30,000 for direct labor and P4,000 for
supervisors (ignore payroll taxes and deductions).
Work in process inv
Factory overhead
Salaries payable
30 000
4 000
34 000
4. Factory utility costs of P8,000 were accrued.
Factory overhead
Factory utility payable
8 000
8 000
5. Prepaid insurance of P1,000 on factory equipment expired in November.
Factory overhead
Prepaid Insurance
1 000
1 000
6. Straight-line depreciation on factory equipment for the month was P10,000
Factory overhead
accumulated depreciation
10 000
10 000
7. Selling and administrative expenses were P40,000 (P30,000 was paid in cash and P10,000 was accrued.
Selling and administrative expenses
Cash
Selling and administrative payable
40 000
30 000
10 000
8. Factory Overhead was transferred to work in process inventory.
Work in process
Factory overhead – applied
26 000
26 000
9. Goods manufactured were transferred to to finished goods inventory. Ending inventories were: work in process,
P60,000 and finished goods, P175,000.
Finished goods
Work in process
208 000
208 000
10. Sales of P217,000 was made on account.
Required:
a. Journal entries to record the above transactions.
b.Statement of cost of goods manufactured.
c. Income Statement
account receivable
sales
217 000
cost of goods sold
finished goods
223 000
217 000
223 000
Schedule 1
JYD company
Statement of cost of goods manufactured
For the month ended November 30, 2019
Raw Materials beginning
Add: purchases
80 000
25 000
Raw Materials available for use
105 000
Less: Raw materials ending
Indirect materials used
xxx
3 000
3 000
Direct Materials Used
Direct Labor
Factory overhead – applied
Total manufacturing cost
Add: work in process inventory beg.
Total goods placed in process
Less: Work in process inventory ending
COST OF GOODS MANUFACTURED
102 000
30 000
26 000
158 000
110 000
268 000
60 000
208 000
Schedule 2
Cost of goods sold
Add: finished goods beginning
Good available for sale
Less: finished goods ending
Cost of goods sold
208 000
190 000
398 000
175 000
223 000
INCOME STATEMENT
JYD Company
Statement of Comprehensive Income
For the month ended November 30, 2019
Sales
Less: Cost of goods sold
Gross profit (loss)
Less: selling and administrative expense
Net profit (loss)
217 000
223 000
(6 000)
40 000
46 000
Problem B
Peter Senen Corporation provided the following account balances as of September 30, 2019:
Cash
P112,000
Accumulated depreciation P 36,000
Accounts Receivable
64,000
Accounts payable
40,000
Finished Goods
48,000
Income tax payable
9,000
Work in process
36,000 Share Capital
500,000
Raw materials
52,000 Retained Earnings
207,000
Property and Equipment
480,000
The following transactions occurred during October:
1. Materials purchased on account,
P150,000
Raw materials
Accounts payable
150 000
150 000
2. Materials issued to production: direct materials- P90,000, Indirect materials- P10,000.
Work in process inventory
Factory overhead
Raw materials
90 000
10 000
100 000
3. Payroll for the month of October 2019 consisted of the following (also paid during the month):
Direct labor
P62,000
Administrative salaries
P16,000
Indirect Labor
20,000
Sales salaries
30,000
Payroll deductions were as follows:
Withholding taxes
P19,800 Phil health contributions P2,000
SSS contributions 7,100 HDMF contributions
2,000
Work in process inventory
Factory overhead
Selling expenses
Administrative expenses
Witholding taxes payable
SSS controbutions payable
Phil health contributions
HDMF contributions
Cash
62 000
20 000
30 000
16 000
19 800
7 100
2 000
2 000
97 100
4. Employer contributions for the month were accrued:
Factory
Selling
SSS contributions
P5,700
P2,000
Philhealth Contributions
1,200
500
EC Contributions
400
300
HDMF contributions
1,600
700
Factory overhead
8 900
Selling expenses
3 500
Administrative expenses
2 000
SSS contributions payable
9 700
Phil health contributions payable
2 000
HDMF contributions payable
2 700
5. Other costs incurred on account:
Indirect factory overhead- P42,000
Selling
- 30,000
Administrative
- 10,000
Factory overhead
Selling expense
Administrative expense
Accounts payable
42 000
30 000
10 000
82 000
Administrative
P1,100
300
200
400
6. Depreciation for the month:
Factory overheadSelling
Administrative
Factory overhead
Selling expense
Administrative expense
Accumulated depreciation
P2,000
1,000
1,000
2 000
1 000
1 000
4 000
7. Factory overhead control account was transferred to work in process, P82,900.
Work in process inventory
Factory overhead – applied
82 900
82 900
8. Work finished and placed in stock, P178,000
Finished goods
Work in process
178 000
178 000
9. Cost of goods sold, P200,000. The markup was 60% of cost.
Accounts receivables
Sales
320 000
Cost of goods sold
Finished goods
200 000
320 000
200 000
10. Cash collected from customers, P260,000
Cash
Accounts receivables
260 000
260 000
11. Materials returned to supplies, P15,000.
Supplies
Raw materials
15 000
15 000
12. Payment of accounts payable, P190,000.
Accounts payable
Cash
190 000
190 000
13. Provision for income tax, P6,000.
Income tax expense
Income tax payable
6 000
6 000
Required: a. Journals entries to record the above transactions
b. Statement of cost of goods manufactured
c. Income statement
d. Balance sheet as of October 31, 2019
Schedule 1
Peter Senen corporation
Statement of cost of goods manufactured
For the month ended September 30, 2019
Raw materials beginning
Add: purchases
52 000
150 000
Raw materials available for use
202 000
Less: Raw materials used
Indirect materials used
Direct materials used
Direct labor
10 000
10 000
192 000
62 000
Factory overhead – applied
Total manufactured cost
82 900
336 900
Add: work in process beginning
36 000
Total goods placed in process
Less: work in process ending
Cost of goods manufactured
372 900
56 900
316 000
Alternative universe HAHAHAHAH 301 000
Schedule 2
Cost of goods manufactured
Add: finished goods beginning
Good available for sale
Less: finished goods ending
Cost of goods sold
316 000
48 000
364 000
(200 000)
164 000
INCOME STATEMENT
Peter Senen Corporation
Statement of comprehensive income
For the month ended September 30, 2019
Sales
Less: Cost of goods sold
Gross profit (loss)
Less: selling and administrative expense
Net profit (loss)
320 000
164 000
156 000
40 000
46 000