Chapter 4 True or False

1. False
6. True
2. True
7. False
3. True
8. False
4. False
9. True
5. True
10.False

11. False
12. False
13. False
14. False
15. False

Matching
1.
a
2.
h
3.
p
4.
d
5.
k

6.
7.
8.
9.
10.

Multiple choice Theory

1, d
6. d
2. b
7. a
3. b
8. c
4. d
9. b
5. d
10. c

11.
12.
13.
14.
15.

16.True
17. False
18. False
19. True
20. True

21. True
22. False
23. False
24. False
25. True

16.
17.
18
19.
20.

21.
22.
23.
24.
25.

b
g
k, l, m
i
n
d
d
c
b
c

a
c
b
b
b

c
b
a
c
b

Problem 1 Garcia Company

1 Journal entries
1.
Materials
Accounts payable
2.

3.
4.
5.

Work in process
Factory overhead control
Materials
Materials
Work in process
FO Control
Accounts payable
Materials

28,000
28,000
22,000
3.000
25,000
800
500
300
1,000
1,000

Payroll
39,000
Withholding taxes payable
3,025
SSS Premiums payable
1,600
Phil Health contributions payable
375
Pag-ibig funds contributions payable
1,200
Accrued payroll
32,800

Page 2
Accrued payroll
Cash

32,800

Work in process
Factory overhead control
Payroll

33,400
5,600

Factory Overhead Control

SSS Premiums payable
Phil Health cont. payable
Pag-ibig cont. payable

3,575

FO Control
Accum Depr.
Prepaid ins.
Accounts payable

15,000

9.

Work in process
FO Applied

26,720
26,720

10.

Finished goods
WP
Job 401
Job 402

72,220
72,220

6.

7.

11.

12.

32,800

39,000
2,000
375
1,200
3,000
950
11,050

31,720
40,500

Accounts receivable
Sales (31,720 x 140%)

44,408
44,408

Cost of goods sold

FG

31,720
31,720

Cash

35,000
35,000

Accounts receivable
Direct materials
3,000
5,500
8,500
Direct materials
5,600
7,000
12,600

Job 401
Direct labor
2,500
10,400
12,900

Factory overhead
2,000
8,320
10,320

Job 402
Direct labor
3,000
12,500
15,500

Factory overhead
2,400
10,000
12,400

Page 3
Direct materials
9,500
( 500)
3.

Job 403
Direct labor
10,500

Factory overhead
8,400

Cost of goods sold statement

Direct materials used
Materials, August 1
Purchases
Less. Purchase returns
Total available for use
Less: Materials, Aug. 31
Ind. Materials
Direct labor
Factory overhead
Total manufacturing costs
Work in process, Aug. 1
Cost of goods put into process
Less: Work in process, Aug. 31

22,000
28,000
1,000
24,800
2,700

27,000
49,000
27,500

Cost of goods manufactured

Finished goods, Aug. 1
Total goods available for sale
Less: Finished goods, Aug. 31
Cost of goods sold - normal
Add. Under applied factory overhead
Cost of goods sold
Problem 2 - Golden Shower Company
2. Journal entries
a. Materials
Accounts payable`````
X 20,000 x 5.20
= 104,000
Y 24,000 x 3.75
= 90,000
Ind. Materials
35,040
b. Payroll
Withholding taxes payable
SSS premiums payable
Phil Health cont. payable
Pag-ibig funds cont. payable
Accrued payroll

21,500
33,400
26.720
81,620
18,500
100.120
27,900
72,220
25,000
97,220
65,500
31,720
155
31,875

229,040
229,040

220,000
31,000
7,000
440
6,600
174,960

Accrued payroll
Cash
Page 4otal

174,960
174,960

c. Work in process
Factory overhead control
Marketing & Adm. Exp. Control
Payroll

156,000
24,000
40,000
220,000

Factory overhead control

Marketing & adm. Exp. Control
SSS Premiums payable
Phil Health contr. Payable
Pag-ibig funds contribution payable
SSS
(5%)
FOC (180,000)
9,000
M & A Exp.control 2,000
11,000

Phil Health
(0,.25%)
360
80
440

14,760
3,280
11,000
440
6,600
Pag-ibig
( 3% )
5,400
1,200
6,600

d. Work in process
Factory overhead control
Materials
Job 101
(x) 4,000 x 5.00
(x) 16,000 x 5.20
Job 103
( x) 2,000 x 5.20
(Y) 5,000 x 3.75

20,000
83,200
103,200

Total
14,760
3,280
18.040

216,350
15,040
231,390
Job 102
(Y) 8,000 x 3.00
(Y) 16,000 x 3.75

24,000
60,000
84,000

10,400
18,750
29,150

e. Work in process
FO Applied
Job 101 = 10,000 x 2.25
102 = 16,000 x 2.25
103 = 12,000 x 2.25

85,500
85,500
22,500
36,000
27,000

f. Accounts receivable
Sales

510,000
510,000

Cost of goods sold

Work in process

380,700
380,700

Page 5
g. Cash
Sales discount
Accounts receivable

494,000
26,000
520,000

h. Marketing & Adm. Exp. Control

Factory overhead control
Cash
Accum. Depreciation
i.

Accounts payable
Cash

j.

Factory overhead applied

Cost of goods sold
FO Control

30,000
25,600
51,600
4,000
170,000
170,000
85,500
6,100
79,400

DIRECT MATERIALS
5,000
103,200
108,200

JOB 101
DIRECT LABOR
4,000
44,000
44,000

FACTORY OVERHEAD
2,000
22,500
24,500

DIRECT MATERIALS
1,200
84,000
85,200

JOB 102
DIRECT LABOR
2,000
80,000
82,000

FACTORY OVERHEAD
800
36,000
36,800

DIRECT MATERIALS
21,.950

JOB 103
DIRECT LABOR
36,000

FACTORY OVERHEAD
27,000

STOCKCARDS
MATERIAL X
ISSUED

RECEIVED
20,000 @ 5.20

104,000
4,000 @ 5.00
18,000 @ 5.20

20,000
93,000

BALANCE
4,000 @ 5.00
20,000
4,000 @ 5.00
20,000
20,000 @ 5/20
104,000
2,000 @ 5.20

10,400

MATERIAL Y
ISSUED

RECEIVED
24,000 @ 3.75

BALANCE
8,000 @ 3.00
24,000
8,000 @ 3.00
24,000
24,000 @ 3.75
90,000

90,000
8,000 @ 3.00
21,000 @ 3.75

24,000
78,750

3,000 @ 3.75

Problem 3 - J.A.N., Inc.

1. Direct material
Direct labor (300 x 8)
Factory OH (200 x 15)
Total mfg. cost

4,300
2,400
3,000
9,700

2. Direct material
Direct labor
Prime cost

4,300
2,400
6,700

3. Direct material
Factory overhead applied
Conversion cost

2,400
3,000
5,400

Problem 4
1. Materials Dept. 1
Dept. 2

2.400
1,300
3,700

3. Dept. 1 (500 x 4.00)

Dept. 2 (320 x 1.00)

2. Dept. 1 (500 x 8.20)

Dept. 2 (220 x 8.00)

4,100
1,760
5,860

5. Gross profit
Less: M & A
Net income

13,120
2,970
10,150

4. Contract price
Less: Cost to manufacture
DM.
3,700
DL
5,860
FO
2.320
Gross profit

Problem 5 - Star Wars Corporation

Requirement No. 1
1.
Work in process
Materials
2.

Work in process
Payroll

50,000
50,000
150,000
150,000

11,250

2,000
320
2,320
P 25,000

11,880
13,120

Page 7
3.
Work in process
FO Applied

90.000
90,000

4.

Finished goods
Work in process

290,000
290,000

5.

Accounts receivable
Sales

427,917
427,917

Cost of goods sold

Finished goods

290,000
290,000

Selling price
Direct materials
Direct labor
Factory OH
Total cost
Gross profit

Job 110
126,667
15,000
50,000
30,000
95,000
31,667

Job 220
170,000
10,000
50,000
30,000
90,000
80,000

Job 330
131,250
25,000
50,000
30,000
105,000
26,250

Total
427,917
50,000
150,000
90,000
290,000
137,917

Problem 6 Ellen Corporation

MATERIALS__________
WORK IN PROCESS_______
Beg.
60,000 5)
125,000
Bal. beg. 85,000
2)
820,000
6)
145,000 Bal. end 80,000
5) DM 125,000
205,000
205,000
4) DL
400,000
3) OH 320,000
Bal.end 110,000
930,000
930,000
FINISHED GOODS______
Bal. beg. 120,000 1)
850,000
2)
820,000 Bal. end 90,000
940,000
940,000
7)

FACTORY OH CONROL____
330,000

1)

COST OF GOODS SOLD_____

850,000

FACTORY OH APPLIED _____

3)
320,000

Entries
1.
Materials
Accounts payable

145000

2.

125,000

Work in process

145,000

Materials

125,000

Page 8
3.
Work in process
Payroll

400,000
400,000

4.

Work in process
FO Applied

320,000
320,000

5.

Finished goods
Work in process

820,000
820,000

6.

Cost of goods sold

Finished goods

850,000
850,000

FO Control
Various accounts
Problem 7 - Ellen Joyce Company
1.
Work in process
Materials

330,000
330,000

2.

Work in process
Payroll

156,000
156,000

3.

Work in process
FO Applied

118,500
118,500

4.

Finished goods
Work in process
Job 201
Job 202
Job 203
Total
Accounts receivable
Sales

343,000
343,000

7.

5.

Cost of goods sold

Finished goods
Cost of goods sold statement
Direct materials
Direct labor
Factory overhead
Total manufacturing costs
Less: Work in process, end
Cost of goods manufactured

98,500
98,500

190,000
94,000
59,000
343,000
350,000
350.000
284,000
284,000
98,500
156,000
118,500
373,000
30,000
343,000

Less: Finished goods, end

Cost of goods sold
Page 8 = Abner Corporation
1.
Direct materials used
Materials end
Materials beg.
Direct materials purchased

59,000
284,000
205,000
90,000
( 95,000)
200,000

2.

Total manufacturing costs

Factory overhead
Materials used
Direct labor costs

675,000
( 175,000)
( 205,000)
295,000

3.

Cost of goods available for sale

Finished goods, end
Cost of goods sold

775,000
(110,000)
665,000

4.

Sales
Cost of goods sold
Gross profit
Problem 9 - Pacific Production Company
1.
Materials - April 1
Purchases
Materials April 30
Direct materials used
Indirect materials used

900,000
(665,000)
235,000

2.

Accrued payroll April 30

Payroll paid
Direct labor cost
Indirect labor

6,000
44,000
( 32,000)
18,000

3.

Direct labor cost

Factory overhead rate
Factory overhead applied

32,000
125%40,000

4.

Direct materials
Direct labor
Factory overhead
Total manufacturing costs
Work in process, beg.
Work in process, end
Cost of goods manufactured

78,000
32,000
40,000
150,000
82,000
( 94,000)
138,000

5.

Cost of goods manufactured

Finished goods, April 1

138,000
296,000

64,000
84,000
( 60,000)
( 78,000)
10,000

Finished goods, April 30

Cost of goods sold
Page 10
Problem 11 Table and Chair Manufacturing Company
1)
Materials
Accounts payable

(304,000)
130,000

2)

Work in process
FOC
Materials

11,480
40

Payroll
Accrued payroll

5,445

Work in process
FOC
Payroll

4,645
800

FOC

2,875

3)

4)

15,000
15,000

11,520
5,445

5,445

Rent Expense Payable

Accum. Depreciation Machines
Accum. Depreciation Factory Building
Utilities Expense Payable
Payroll Taxes Payable
5)

Work in process
FO Applied

6)

Finished goods
Work in process
Direct materials
Direct labor
Factory overhead
Total

7)

Cash

1,500
160
490
225
300
5,261.25
5,261.25

Job 101
10,500
3,175
3,618.75
17,293.75

21,386.25
21,385.25
Job 102
Total
980
11,480
1,470
4,645
1,642.50
5,261.25
4,092.50
21,386.25
25,000

Sales
Cost of Goods Sold
Finished goods

25,000
17,293.75
17,293.75

Accounts receivable
Sales

4,000

Cost of goods sold

Finished goods

4,092.50
4,092.50

4,000

Page 11
Problem 11 Candy Corporation
1)

Job 101
Job 102
WP, July 1

2)

Job 101
Job 102
Job 103
Total

3)

P 175,000
120,000
P 295,000
80,000 x 125%
95,000 x 125%
115,000 x 125%

= P 100,000
=
118,750
=
143,750
362,500

Job 101
175,000

Job 102
120,000

Total
295,000

55,000
80,000
100,000
410,000`

80,000
95,000
118,750
413,750

135,000
175,000
218,750
823,750

Job 101
Add: Underapplied factory overhead
Actual FO
375,000
Less: Applied FO
362,500
Cost of goods sold actual

410,000

5)

FG, Inventory July 31 (Job 102)

413,750

6)

WP, Inventory, July 31 ( Job 103)

Materials
Labor
Factory overhead
Total WP Inventory, July 31

92,000
115,000
143,750
350,750

WP, beg.
Cost added
Materials
Labor
Overhead
Total
4)

Problem 12 MLT Company

1)
Materials, June 1
Purchases
Materials, June 30
Indirect materials
Direct materials used
2)

Cost of goods manufactured

Work in process, June 30
Work in process, June 1

12,500
422,500`

15,000
33,000
( 19,000)
( 1,000)
28,000
120,000
30,000
( 40,000)

3)

Total manufacturing cost

110,000

Cost of goods available for sale

Total manufacturing costs
Finished goods, June 1

190,000
(110,000)
80,000

Problem 13 Miracle Company (start with No.. 3 then No. 2)

1)
Cost of goods manufactured
168,000
WP, January 31
95,000
WP, January 1
( 80,000)
Total manufacturing cost
183,000
Direct labor
(63,000 / 75%)
( 84,000)
Factory overhead
( 63,000)
Direct materials used
36,000
Materials January 31
50,000
Indirect materials used
1,000
Purchases
( 46,000)
Materials, January 1
41,000
2)

Cost of goods sold normal

Finished goods, January 31
Finished goods, January 1
Cost of goods manufactured

150,000
78,000
( 60,000)
168,000

3)

Sales ( 25,000 / 12.5%)

Selling and administrative expenses
Net income
Cost of goods sold, actual
Overapplied FO
Actual
62,800
Less: Applied
63,000
Cost of goods sold, normal

200,000
( 25,000)
(25,200)
149,800
200
150,000

Problem 14 Nona Company

1)

Units sold
Finished goods, end
Finished goods, beg
Units completed/manufactured

2)

Direct materials used

Direct labor
Factory overhead
Total mfg. cost/cost of goods manufactured
Divide by units completed
Cost of goods manufactured per unit

12,300
300
( 100)
12,500
1,847,700
2,125,800
1,026,500
5,000,000
12,500
400/unit

Page 13
3)
From Finished goods, beg. (100 units x P 430 )
From units completed during the period ( 12,200 x P 400)
Cost of goods sold
Or
Finished goods, beg.
Cost of goods manufactured
Finished goods, end ( 300 x P400)
Cost of goods sold

43,000
4,880,000
4,923,000
43,000
5,000,000
( 120,000)
4,923,000

MULTIPLE CHOICE PROBLEMS

1. A
11. OH IS APPLIED AT 125% OF DLCOST - B
2. A
12, A
21. C
3. C
13. C
22. C
4. D
14. D
23. C
5. A
15. A
24. B
6. B
16. D
25. 46,000
7. B
17. C
26. D
8. A
18. C
27. B
9. A
19. D
28. B
10. B
20. C
29. D
30. B