Activity No.

The post-closing trial balance of ABC Manufacturing Company at September 30, 2020 is reproduced as
follows:

ABC Manufacturing Company

Post-Closing Trial Balance
September 30, 2020

Cash 15,000
Accounts Receivable 18,000
Finished Goods 25,000
Work in Process 4,000
Materials 8,000
Building 156,000
Accumulated Depreciation – Building 23,400
Factory Equipment 108,000
Accumulated Depreciation – Factory Equipment 54,000
Office Equipment 12,000
Accumulated Depreciation – Office Equipment 2,000
Accounts Payable 30,000
Capital Stock 175,000
Retained Earnings 61,600
346,000 346,000
During the month of October, the following transactions took place:
a. Raw materials at a cost of Php 50,000 and general factory supplies costing Php 8,000 were
purchased on account. (Materials and supplies are recorded in the materials account.)
b. Raw materials to be used in production costing Php 41,000 and miscellaneous factory supplies
costing Php 5,500 were issued.
c. Wages and salaries incurred and paid for the month were as follows: factory wages (including
Php 2,500 indirect labor), Php 34,000, and selling and administrative salaries, Php 5,000. (Ignore
payroll withholdings and deductions.)
d. Distributed the payroll in c.
e. Depreciation was recorded for the month at an annual rate of 5% on the building and 20% on
the factory equipment and office equipment. The sales and administrative staff uses
approximately one-fifth of the building for its offices.
f. During the month, various other expenses totaling Php 5,200 were incurred on account. The
company has determined that one-fourth of this amount is allocable to the office function.
g. Total factory overhead costs were transferred to Work in Process.
h. During the month, goods with a total cost of Php 79,000 were completed and transferred to the
finished goods storeroom.
i. Sales for the month totaled Php 128,000 for goods costing Php 87,000 to manufacture. (Assume
that all sales were made on account.)
j. Accounts receivable in the amount of Php 105,000 were collected.
k. Accounts payable totaling Php 55,000 were paid.
Required:
a. Prepare journal entries to record the transactions.
b. Set up T-accounts for all accounts listed in the September 30 post-closing trial balance and for
Cost of Goods Sold, Factory Overhead, Selling and Administrative Expenses, Sales, and Wages
Payable. Calculate the balances in the accounts on October 31.
c. Prepare a statement of cost of goods manufactured, income statement and balance sheet.