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Workbook

CGS # 9.1: Test your understanding

• 1. Ascertain Cost of Goods Sold from the following figures:

Unit 9
 Opening Inventory / Stock Rs. 3,700 Purchases 20,800 Closing Inventory / Stock 2,500 CGS = OI + P - CI 2. Ascertain Cost of Goods Sold from the following figures: Opening Stock Rs. 8,500 Purchases 30,700 Direct Expenses 4,800 Indirect Expenses 5,200 Closing Inventory 9,000 CGS = OS + P + DE - CI 3. Ascertain Purchases from the following figures: Cost of Goods Sold Rs. 80,700 Opening Stock 5,800 Closing Stock 6,000 Purchases = CGS – OS + CS 4. Calculate Gross Profit from the following figures: Cost of Goods Sold Rs. 70,800 Sales 130,200 GP = Sales - CGS 5. Ascertain Gross Profit from the following figures: Opening Inventory Rs. 5,570 Purchases 13,816 Sales 15,284 Purchase Return 390 Return Inward 524 Closing Stock 8,880 GP = Net Sales + CS – OI – Net Purchases 6. From the following information extract Gross Profit and Net Profit: Beginning Inventory Rs. 2,400 Carriage in Rs. 524 Purchases 15,205 Wages 2,800 Sales 20,860 Wages Outstanding 96 Return Outward 185 Loss by fire 1,000 Return Inward 860 Indirect Expenses 200 Closing Inventory 3,840

GP = Net Sales + CI – BI – Net Purchase - Direct Expenses NP = GP – Indirect (other than Direct Expenses)

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Workbook

CGS # 9.2: Test your understanding

Unit 9
 1. Ascertain Cost of Goods Sold from the following figures: Opening Stock Rs. 15,000 Purchases 5,000 Closing Stock 7,000 Cost of Goods Sold 2. Ascertain Gross Profit / Loss form the following figures: Opening Inventory Rs. 12,000 Net Purchases 7,500 Sales 14,000 Closing Stock 1,500 Return Inward 2,500 Gross Loss 3. Ascertain Purchases from the following figures: Cost of Sales Rs. 90,000 Beginning Inventory 15,000 Ending Inventory 7,000 Purchases 4. From the following information extract Gross Profit and Net Profit: Opening Inventory Rs. 3,000 Purchases 14,000 Sales 22,000 Closing Inventory 5,500 Sales Return 1,500 Wages and Salaries 500 Financial Charges 1,500 Carriage Inward 150 Salaries Outstanding 400 Carriage Outward 100 Gross Profit Net Profit CGS # 9.3: Test your understanding 1. Ascertain Cost of Goods Sold from the following figures: Opening Stock Rs. 17,000 Purchases 4,000 Closing Stock 2,500 Cost of Goods Sold
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 Workbook Unit 9 2. Ascertain Gross Profit / Loss form the following figures: Opening Inventory Rs. 8,000 Net Purchases 9,500 Sales 27,000 Closing Stock 5,000 Return Inward 4,500 Gross Profit 3. Ascertain Purchases from the following figures: Cost of Sales Rs. 110,000 Beginning Inventory 45,000 Ending Inventory 26,000 Purchases 4. From the following information extract Gross Profit and Net Profit: Opening Inventory Rs. 5,500 Purchases 7,000 Sales 33,000 Closing Inventory 7,500 Sales Return 2,000 Wages and Salaries 1,500 Financial Charges 2,500 Carriage Inward 150 Wages Outstanding 400 Carriage Outward 100 Gross Profit Net Profit
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Workbook

Unit 9

CGS # 9.4: The following are the figures relating to the YYY Commodity Production for the month of March, 2010.

 Description Amount Description Amount Stock on 1.03.2010_ Raw Material Rs. 75,000 Stock on 31.03.2010_ Raw Material Rs. 50,000 Factory overheads 8,000 Sales 270,000 Purchases of Raw Material 100,000 Wages on Purchases 5,000 Stock on 1.03.2010_ Finished Goods 48,000 Stock on 31.03.2010_ Finished Goods 25,000 Direct Labor 12,000 Office & Admin Overhead 3,000 Return inward 10,000 Marketing Expenses 15,000 Work in process on 1.03.2010 5,000 Work in process on 31.03.2010 3,000

Requirement: Prepare statement showing Prime Cost; Conversion Cost; Total Cost; Cost of Goods Manufactured; Cost of Goods Sold. Calculate Gross Profit; Net Profit and per unit cost by assuming that 38,000 units were produced during March.

YYY Commodity Production

Cost of Goods Sold Statement

For the month ended March, 2010

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Gross Profit = Net Profit = Per Unit Cost = Conversion Cost =

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Workbook

CGS # 9.5: These data relate to Zakar Co.'s July 2009 operations:

Unit 9
 Materials, Beginning ……………… .. …… Rs. 7,000 Materials, Ending ……………… .. ……… Rs. 9,000 WIP, Beginning ……………………………. 7,500 WIP, Ending ………………………………. 3,500 Finished goods, Beginning ………………… 10,000 Finished goods, Ending …………………… 12,000 Materials used ……………………………… 46,800 Direct Expenses ……………………….…… 400 Selling and general expenses ………………. 6,700 Direct Labour ……………………………… 8,000

Factory overhead is applied at the rate of 80% of direct labor cost.

Requirement:

Cost of materials purchased, Cost of goods manufactured, Cost of goods sold and Conversion Cost.

Zakar Company

Cost of Goods Sold Statement

For the Ended July, 2009

Cost of Goods Sold
Rs. 63,200

Conversion Cost =

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Workbook

Unit 9

CGS # 9.6: Following are data Extracted from Star Pvt. Ltd. at the end of December 31 st , 2008.

 Sales ………………………… Rs. 14,000,500 Sales Return ………………………… .. ... Rs. 25,200 Purchases (Net) ……………… 2,400,000 Transportation inward ……………… 32,000 Direct Labour ……………… .. 3,204,000 FOH (Total)…………………………… .. 1,885,600 Sales Salaries ……………… .. 200,000 Advertising Expense ………………… 155,000 Delivery Expense …………… 65,000

During the year 25,000 units were completed.

Inventories

December, 2008

January, 2008

Finished Goods ……………………………… Rs. 467,400 ………………………………. Rs. 620,000

 Work in Process …………………………… ... 136,800 ………………………………. 129,800 Materials …………………………………… .. 196,000 ………………………………. 176,000

Requirements:

(1) Total Factory Cost (4) Gross Profit and Net Profit

(2) Cost of Goods Manufactured (5) Per Unit Cost of Goods Manufactured

(3) Cost of Goods Sold

Star Pvt. Ltd

Cost of Goods Sold Statement

For the Ended December, 2008

Cost of Goods Manufactured
7,494,600
Gross Profit
=
Net Profit
=
Per unit Cost of goods manufactured =

CGS # 9.7: Following Data related to XYZ Manufacturing at the end of April, 2010. INVENTORIES

Ending

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 Workbook Unit 9 Finished Goods ……………………………………… .. 95,000 ……………………………… .. ………………………………. ? Work in Process ………………………………………. Direct Material ……………………………………… .. ? 95,000 …………………………….…. 70,000 90,000 Cost incurred during the period Cost of Goods Manufactured …………………………… …. .. 574,000 584,000 .. 167,000 Total Manufacturing Cost …………………………………… Factory Overhead ……………………………………………

Direct Material Used …………………………………………. 193,000

During the year 15,000 units were completed.

 Requirements: (a) Prime Cost (b) Cost of Goods Sold (c) Per Unit Cost (d) Conversion Cost

XYZ Manufacturing

Cost of Goods Sold Statement

For the Ended April, 2010

Per unit Cost of goods manufactured
Conversion Cost = Direct Labor + FOH
=
=

CGS # 9.8: Account Department of the ABC Co. provides the following data at end of June 2009, you are required to prepare Cost of Goods Manufactured; Cost of Goods Sold; find out Gross Profit / Loss & Net profit / Loss and Per unit Manufacturing Cost at the Year ended May 30 th , 2009, assuming that Net Sales of Rs. 72,000, Marketing Expense 5%, Advertising Expense 1 % and Other Expense 3% of Net Sales; Net Purchases Rs. 36,000 and Direct Expenses are 1 % of Net Purchases; FOH 2/3 of Direct Labor and Direct Labor cost is Rs. 15,000. Units are produced during the period was 5,000.

Beginning Inventories

Rs

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Ending Inventories

Rs

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Workbook

Finished Goods ……………………………………. Work in Process …………………………………… Material …………………………………………….

7,000

8,000

8,000

Unit 9

……………………………………. 10,200 …………………………………… 15,000

…………………………………….

8,500

XYZ Manufacturing

Cost of Goods Sold Statement

For the Ended June, 2009

Cost of Goods Sold
Rs. 50,660

Gross Profit = Net Profit =

Per Unit Manufacturing Cost =

CGS # 9.9: Following data has been extracted from the books of City Company; you are required to prepare Cost of Goods Manufactured, Cost of Goods Sold Statement, Gross Profit / Loss and Net Profit / Loss at the end of September 30 th , 2009.

 Stock of Raw Material (Opening) 25,000 Electricity Expense 600 Freight Inward 8,500 Selling Expenses 6,000 Freight outward 6,000 Miscellaneous Expenses 14,000 Wages 18,000 Stock of Raw Material (Closing) 2,000
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Unit 9
Workbook
Sales
FOH
Return inward
Return Outward
Factory Fuel and Power
Work in Process (Opening)
Work in Process (Closing)
Repairs to Office building
418,000
Stock of Finished Goods:
26,000
5,000
3,500
8,000
7,000
4,000
4,650
Opening
Closing
Provision for Doubtful Debts
Depreciation
Purchases of Raw Material
Direct Labor Cost
30,000
40,000
8,500
4,000
250,000
2,600
16,000
City Company
Cost of Goods Sold Statement
For the Ended September, 2009
Prime Cost
320,000
Cost of Goods Manufactured
349,000
Cost of Goods Sold
Rs. 339,000
Gross Profit
=
Net Profit / Loss
=
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Workbook

Unit 9

CGS # 9.10: Following data has been extracted from the books of AAA Wood Company; you are required to prepare Cost of Goods Sold Statement, Gross Profit / Loss and Net Profit / Loss at the end of June 30 th , 2008.

 Cash 810 Account Receivable 1,878 Allowance for doubtful accounts 90 Direct Material Inventory, July 01, 2007 375 Work-in-process, July 01, 2007 450 Finished goods, July 01, 2007 333 Carriage inward 54 Factory Equipments 5,880 Accumulated Depreciation _ Factory Equipment 1,695 Office Equipment 1,842 Accumulated Depreciation _ Office Equipment 738 Account Payable 1,113 Miscellaneous Expenses Payable 366 Capital 7,167 Net Sales 16,290 Net Purchases 3,201 Direct Labor 4,605 Factory Overheads 3,687 Selling Expenses 2,616 Administrative Expense 978 Income Tax 750 Total Rs. 27,459 Rs. 27,459

Inventory on June 30 th , 2008 are

Direct Material Inventory Rs. 453; Work-in- Process Inventory Rs. 294 and Finished Goods Inventory Rs. 402

AAA Wood Company

Cost of Goods Sold Statement

For the Ended June, 2008

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Unit 9
Workbook
Gross Profit
=
Net Profit
=
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