ADAMSON UNIVERSITY

Intermediate Accounting 1 – Midterms Assignment 8

Prof. Judith Francisco – Luna

Name _________________________________________ Section _____________ Date ____________________

A. Classify the following as either (ME) Manufacturing, (SE) Selling or (AE) Administrative Expenses.

________ 1. Factory Supplies like nails ________ 6. Cost of repairing a machine breakdown
________ 2. Advertising Posters ________ 7. Litigation expenses of the company
________ 3. Rent Expense on Factory Building ________ 8. Free samples to customers
________ 4. Freight Out ________ 9. Doubtful Accounts Expense
________ 5. Salary of the CEO ________ 10. Transportation Expense of Salesmen
B. The following information was available from the inventory records of the Brooks Company for
January 2019:
Units Unit Cost Total Cost
Balance at January 1 3,000 P 19.55 P 58,650
Purchases:
January 6 10,200 21.50 219,300
January 26 2,250 20.60 46,350
Sales:
January 7 2,700
January 31 7,200
Requirements: Compute for the ending inventory and cost of goods sold under each of the following cost flow
formulas: (Where necessary, round off unit cost to nearest centavo and total cost to nearest peso).
Ending Inventory Cost of Goods Sold

FIFO Periodic __________________ __________________

FIFO Perpetual __________________ __________________

Weighted Average-Periodic __________________ __________________

Moving Average-Perpetual __________________ __________________

PROBLEM A
Data for materials inventory for the month ended August 31, 2019 are as follows:
Raw Materials Inventory, August 1 P20,750
Raw Materials Purchases 20,500
Freight In of Raw Materials Purchases 475
Factory Supplies Used 600
Purchase Returns and Allowance 500
Purchase Discounts 200
Freight Out 350
1. What is the Cost of Direct Materials used for August if the count in the storeroom yielded P15,900

Raw Materials on August 31? _____________________

PROBLEM B
The Showroom Manufacturing Company indicated the following inventories in its recent Statement of Financial Position:
For the year ended 2019 2018
Raw Materials P33,700 P36,500
Work in Process 74,450 83,750
Finished Goods 21,900 25,450
Additional information for the year 2019 shows that:
Sales P280,000
Direct labor 45,000
Manufacturing expenses 24,400
Raw materials purchases 50,000
Operating expenses 14,600

2. How much is the Cost of Direct Materials used? _____________________

3. How much is the Total Manufacturing Cost? _____________________

4. What is the Cost of Goods Manufactured? _____________________

5. How much is the Cost of Goods Sold? _____________________

6. How much is the Net Income for 2019? _____________________

PROBLEM C
Manufacturing costs and other accounts of Toy Manufacturing Company appeared in its December 31, 2019
trial balance as follows:

Sales P 5,000,000 Sales Allowance P 25,000

Raw Material Purchases 1,200,000 Freight In 28,000
Direct Labor 1,500,000 Factory Overhead 1,750,000
Sales Salaries 200,000 Advertising Expense 150,000
Office Supplies Used 7,850 Delivery Expense 60,000

Inventories: End of 2019 End of 2018

Finished Goods P250,000 P320,000
Work in Process 78,500 65,000
Materials 95,000 88,000

Compute for the -

7. Total Manufacturing Costs _____________________

8. Cost of Goods Manufactured _____________________

9. Cost of Goods Sold _____________________

10. Gross Profit _____________________

11. Net Income _____________________