A.

1
Hally Consumer Products
Statement of Cost of Goods Manufactured
For the year ended December 31,2020

Raw Materials:
Direct Materials, beginning ₱ 30,000.00
Direct Materials Purchases 120,000.00
Direct Materials Available for Use 150,000.00
Less: Direct Materials, ending 20,000.00
Direct Materials USed ₱ 130,000.00
Direct Labor 180,000.00
Manufacturing Overhead
Depreciation, factory 270,000.00
Indirect Materials 40,000.00
Utilities, factory 20,000.00
Indirect Labor 55,000.00
Maintenance 20,000.00
Insurance 10,000.00 415,000.00
Total Manufacturing Cost ₱ 725,000.00
Add: Work in Process, beginning 140,000.00
Total Cost of Goods Put into Process 865,000.00
Less: Work in Process, ending 135,000.00
Cost of Goods Manufactured ₱ 730,000.00
A.2

Hally Consumer Products

Statement of Financial Performance

For the year ended December 31,2020

Sales ₱ 1,600,000.00

Less: Cost of Goods Sold 750,000.00

Gross Profit 850,000.00

Less: Selling and Administrative Expenses 250,000.00

Net Income ₱ 600,000.00

B. Essay/Discussion
Measurement is the process of determining the monetary amounts at which the items of
the financial statements are recognized and carried in the balance sheet and income statement.
There are four common measurement bases: historical cost, current cost, realizable value, and
present value.
The historical cost of an asset is the amount paid in cash or cash equivalents or the fair
value of the consideration received at the time of purchase.This is sometimes called the
"previous purchase exchange price." When generating financial statements, the most commonly
used measuring base is historical cost.
The current cost is the amount of cash or cash equivalent that would be required to be
paid for the acquisition of the same or equal asset today. This is sometimes called the "current
purchase exchange price."
Realizable value is the amount of money (or cash equivalent) that could be made by
disposing of an asset in a timely manner. Additionally, you may hear this referred to as the
"current sale exchange price."
The discounted value of future cash inflows that the asset is expected to generate in the
usual course of business is known as the present value. This is sometimes referred to as the
"future exchange rate."
The most generally utilized foundation for comparison between these option is the
historical cost. Additionally, it's frequently combined with other measurements to get the most
accurate results. Inventories, for example, are often recorded at the lower of cost or net realizable
value, but marketable securities are recorded at their market value, and companies prefer to
record pension liabilities at their present value.