ALVARO, FERNEL JEAN C.

1742- AE212 TTHS 3-5PM

EXERCISE 2 - 5. JOURNAL ENTRIES – ACTUAL COST SYSTEM

REQUIRED: Prepare journal entries for these transactions (with no explanations)

TRANSACTIONS JOURNAL ENTRIES-ACTUAL COST SYSTEM

a. Materials purchases Purchase P 750,000

on account, P750,000 Vouchers Payable P 750,000
b. Purchase returns and Vouchers Payable P 50,000
allowances, P50,000 Purchase Returns and
allowances P 50,000
c. Payment of payroll:
Total Earnings
P655,000
Less: SSS premiums
P17,500 NO JOURNAL ENTRY
Philhealth
premiums
8,000
Pag-IBIG premiums
2,500
Withholding taxes
12,000
Advances to
employees 65,000
Union dues 30,000
Net amount P520,000
d. Breakdown of the Direct Labor P 156,000
payroll: factory, 60% Indirect Labor 31,200
(Direct labor – 50%, Superintendence 124,800
Superintendence – 40%; Sales salaries 130,000
Indirect labor – 10%); Office salaries 78, 000
sales, 25%; and, office, Vouchers Payable P 520,000
15%.

e. Disbursements are Factory, building and contents P 2,500

made for the following: Lubricants, rags, broom and
Insurance premiums – Insecticide 800
factory building and Electricity bill 4,100
contents P2,500 Water bill 900
Lubricants, rags, brooms Voucher Payable P 5,000
and insecticide 800 Cash disbursement 3,300
Electricity bill 4,100
Water bill 900
f. Sales on account, Sales P 2,200,000
P2,200,000. Vouchers payable P 2,200,000

g. Sales returns and Vouchers Payable P 60,000

allowances, P60,000. Sales returns and
allowances P 60,000
h. The following are paid: Vouchers Payable P 9,500
Bond paper, pencils and Office supplies P 1,500
other office supplies Advertisements 6,000
P1,500 Store supplies 2,000
TV and radio
advertisements 6,000
Plastic bags, masking
tapes and other store
supplies 2,000
i. The employer’s SSS Contribution- Factory P 15,750
contributions for SSS, SSS Contribution – Selling 3,375
Philhealth and Pag-IBIG SSS Contribution – General 3,375
premiums are as follows: SSS Payable P 22,500
SSS P20,000;
Philhealth-P8,000;
Pag-IBIG-P2,050) Philhealth Contribution - Factory P 5,600
and Philhealth Contribution - Selling 1,200
EC premiums of P2,500. Philhealth Contribution - General 1,200
The total of these is Philhealth Payable P 8,000
distributed as follows:
factory, 70%; sales, Pag-IBIG Contribution – Factory P 1,435
15%; and office, 15%. Pag-IBIG Contribution – Selling 307.5
Pag-IBIG Contribution – General 307.5
Pag-IBIG Payable P 2,050
j. Amounts due to SSS, SSS Payable P 22,500
Philhealth and Pag-IBIG Vouchers Payable 22,500
premiums are remitted
together with the Philhealth Payable P 8,000
employer’s counterpart, Vouchers Payable 8,000
including payable to BIR
and Union. Pag- IBIG Payable P 2,050
Voucher Payable 2,050

Vouchers Payable P 32,550

Cash 32,550
k. Collections from NO JOURNAL ENTRY
customers, P195,000

. Depreciation is Factory building P 15,000

provided on: Factory machinery and 7,000
factory building, equipment 5,000
P15,000; factory Office furniture and equipment 8,000
machinery and Delivery van 4,200
equipment, P7,000; Store furniture P 39,200
office furniture and Accumulate depreciation
equipment, P5,000;
delivery van, P8,000;
and, store furniture,
P4,200

m. Accrual of salaries Other factory expense P 8,000

and wages: factory- Other selling expense 3,000
P8,000 (direct labor); Other general expense 2,500
sales-P3,000; and, Vouchers Payable P 13,500
office- P2,500.
n. Closing entries for
 inventories:

 Set up ending Raw materials P 20,000

inventories Work in process 15,000
Finished goods 19,000
Manufacturing Summary P 54,000
 Close beginning Finished goods, end P 19,000
inventories Income summary 19,000

Manufacturing Summary 34,000

Raw materials 18,000
Work in process 16,000

Income summary 10,000

Finished goods , beg 10,000

EXERCISE 2-6: JOURNAL ENTRIES – NORMAL COST SYSTEM

REQUIRED: Journal entries showing the corresponding entries for the subsidiary records.

TRANSACTIONS JOURNAL ENTRIES - NORMAL COST SYSTEM

a. Materials purchase Materials P 30,000

account, P30,000. Vouchers Payable 30,000

b. Purchase returns, Vouchers Payable P 3,500

P3,500. Materials 3,500

c. Materials issued: direct Work in process P 22,500

materials- P22,500 and Factory over head 5,500
indirect materials-P5,500. Materials 28,000

d. Payment of payroll:
Amount earned P46,200
Deductions:
SSS P 1,800 NO JOURNAL ENTRY
Philhealth 600
Pag-IBIG 550
Income taxes withheld 900
Net amount: 3,850
e. Breakdown of payroll: Factory Payroll P 25,000
Direct labor P18,000 Withholding tax payable 900
Indirect labor 7,000 Sales SSS Payable 1,800
salaries and wages 9,500 Philhealth Payable 600
Office salaries and wages Pag- IBIG Payable 550
11,700 Vouchers Payable 21,150

Work in process 18,000

Factory over head 7,000
Factory payroll 25,000

Selling expense control 9,500

 General expense control 11,700
Withholding tax payable 900
SSS Payable 1,800
Philhealth Payable 600
Pag- IBIG Payable 550
Vouchers Payable 17,350

f. The corresponding Factory overhead control P 1,300

employer’s contributions Selling expense control 850
for SSS, Philhealth and Pag- General expense control 400
IBIG and the premiums for SSS Payable 2,550
workmen’s compensation
Factory overhead control 300
(SSS and EC Contributions Selling expense control 200
are taken as one) General expense control 100
Philhealth Payable 600

Factory overhead control 270

Selling expense control 170
General expense control 110
Pag-IBIG payable 500

g. The contributions for Vouchers Payable P 3,650

SSS, Medicare, EC and Pag- Cash 3,650
ibig are remitted.

h. Payments to suppliers of Voucher payable P 22,300

materials, P22,300. Cash 22,300

i. Factory overhead Factory overhead control P 19,800

charged to production: Voucher Payable 19,800
110% of direct labor cost.

j. Insurance premiums paid, Factory overhead control P 1,100

P2,200 charged as Selling expense control 440
follows:factory-50%; General expense control 660
store-30%; office-20%. Vouchers Payable 2,200

k. Factory repairs Vouchers Payable P 3,300

paid,P3,300. Factory overhead control 3,300

l. Cost of goods Cost of goods sold P 46,000

manufactured, P46,000. Finished goods 46,000

m. Sales on account, Account receivable P 75,000

P75,00; Sales 75,000
cost of goods sold,
P40,000 Cost of goods sold 40,000
Finished goods 40,000
n. Sales returns, P10,500; Sales returns and allowances P 10,500
cost of goods returned, Accounts receivable 10,500
P6,800.
Cost of goods returned P 6,800
 Account receivable 6,800
o. Collections from NO JOURNAL ENTRY
customers, P55,000.

. p. Provisions from Factory overhead control P 900

depreciation: factory General expense control 950
machinery and equipment- Accumulated depreciation 1,850
P900; store furniture-P400;
and office furniture-P550

q. The factory overhead

variance is set up and
closed to cost of goods
sold.

Exercise 2-7. COST FLOW- JOB ORDER COST SYSTEM

Required:
1. What is Kapangan's work in process inventory balance at the beginning of October?

Direct Labor P 13,000

Factory overhead 19,500
Work in process, beg. P 32,500

2. What is Kapangan's cost of goods manufactured for October?

Direct materials P 57,500

Direct labor 26,000
Applied factory overhead 39,000
Total factory cost P 122,500
Add: work in process, beg. 32,500
Total cost placed in process P 155,000
Less: work in process inventory, end 59,500
Cost of goods manufactured P 95,500

3. What is Kapangan's work in process inventory balance at the end of October?

Direct material P 27,500

Direct labor 13, 000
Factory overhead 19, 500
Work In process, end P 59,500

4. Prepare simple cost sheets

 Kapangan Manufacturing Company
For : J. Cantodo Job Order no. A15
Product: chairs Specification: wood
Quantity: 250 pieces

FACTORY OVERHEAD
MATERIAL DIRECT LABOR
COSTS COSTS
Date Amount Date Amount Date Amount

30/9 9,000 30/9 6,000 1/10 4,500

1/10 2,500
11,500 1/10 3,000
9,000 4,500

COST SUMMARY:
MATERIAL COST P 11,500
DIRECT LABOR COST 9,000
FACTORY OVERHEAD (APPLIED) 4,500
TOTAL COST P 25,000

ADD: MARK UP 5,000

SELLING PRICE P 30,000

Kapangan Manufacturing Company

For : E. Excellent Job Order no. B18

Product: tables Specification: wood
Quantity: 50 pieces
FACTORY
MATERIAL COSTS DIRECT LABOR COSTS
OVERHEAD
Date Amount Date Amount Date Amount

1/10 12,000 1/10 8,000 1/10 12,000

12,000 8,000 12,000

COST SUMMARY:
MATERIAL COST P 12,000
DIRECT LABOR COST 8,000
FACTORY OVERHEAD (APPLIED) 12,000
TOTAL COST P 32,000

ADD: MARK UP 3,000

SELLING PRICE P 35,000

Kapangan Manufacturing Company

For : B.Santos Job Order no. B19

Product: doors Specification: wood
Quantity: 21 pieces
 FACTORY
MATERIAL COSTS DIRECT LABOR COSTS
OVERHEAD
Date Amount Date Amount Date Amount

1/10 25,000 1/10 10,000 1/10 15,000

25,000 10,000 15,000

COST SUMMARY:
MATERIAL COST P 25,000
DIRECT LABOR COST 10,000
FACTORY OVERHEAD (APPLIED) 15,000
TOTAL COST P 40,000

ADD: MARK UP 2,000

SELLING PRICE P 42,000

Kapangan Manufacturing Company

For : K. Lardizabal Job Order no. C11

Product: cabinets Specification: wood
Quantity: 50 pieces
FACTORY
MATERIAL COSTS DIRECT LABOR COSTS
OVERHEAD
Date Amount Date Amount Date Amount

1/10 18,000 1/101 5,000 1/10 7,500

18,000 5,000 7,500

COST SUMMARY:
MATERIAL COST P 18,000
DIRECT LABOR COST 5,000
FACTORY OVERHEAD (APPLIED) 7,500
TOTAL COST P 30,500

ADD: MARK UP 4,500

SELLING PRICE P 35,000

5. If Kapangan sells its products at 140% of cost, how much is the company’s gross profit for
October?

JOB A15 ( 25,000 X 140%) = P 35,000

JOB B18 ( 32,000 X 140%) = 44,800
JOB B19 ( 40,000 X 140%) = 56,000
JOB C11 ( 30,500 X 140%) = 42,000
Total gross profit: P 177,800