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MIDTERM EXAM
October 11, 2023
SET A
A. PROBLEM SOLVING.
1. MMB Inc., an appliance manufacturer, has 2 office workers, 2 sales workers and 2 production workers. The
following information pertaining to its payroll are as follows:
a. Payroll for all employees are paid every 15th and end of the month.
b. All applicable payroll deductions are deducted on month end payroll of all employees except for cash
advances wherein it is divided equally to the number of pay periods during the month and deducted on
each pay period.
c. SSS, Philhealth and Pag-ibig premiums are computed based on the Monthly Base Pay. SSS premiums are
provided below; Philhealth (PHIC) is at 4% (ER and EE), and Pag-ibig (HDMF) is at 2% or a maximum
of 200 (ER and EE).
g. Overtime of all employees was rendered during regular working days. Overtime pay is recorded by the
company separately from the Base Pay of employees to track down the cost of this expense and monitor
the efficiency of the employees. These expenses are recorded according to their respective departments.
h. The following are the accounts used by the company:
Basic Salaries Expense – Sales Cash
Basic Salaries Expense – Office SSS Premiums Expense
Basic Salaries Expense – Production Pag-ibig Premiums Expense
Overtime Pay – Sales Philhealth Premiums Expense
Overtime Pay – Office SSS Premiums Payable
Overtime Pay – Production Pag-ibig Premiums Payable
Advances to Employees Philhealth Premiums Payable
Withholding Tax Payable Salaries Payable
Required:
a. Prepare the needed payroll registers for the two (2) pay periods for the month of September. Use the
provided Proforma Payroll Register. Total each money columns. All amounts to be rounded off to two
(2) decimal places.
b. Journalize each payroll register you have prepared and also the payment made for each pay period.
c. Prepare a schedule to determine the total employer’s counterpart on SSS with EC, Philhealth and Pag-ibig
premiums for the month of September.
1
BSA 13C
MIDTERM EXAM
October 11, 2023
SET A
d. Journalize, in one compound entry, the employer’s counterpart as determined in letter c.
e. Journalize the individual payments/remittances to the respective government agencies.
2. Diddle Company, a manufacturing company, produces the following balances from its books at September 30,
20x3:
Raw materials, Oct 1, 20x2 7,450
Work in process, Oct 1, 20x2 5,330
Finished goods, Oct 1, 20x2 12,110
Purchases of raw materials 128,740
Purchases returns 310
Sales returns 1,215
Freight in 1,055
Rent expense 5,250
Light, heat and power 3,270
Direct wages 190,520
Indirect wages 14,320
Telephone 890
Factory repairs 2,215
Insurances 1,420
Factory salaries 38,000
Office salaries 24,000
Sales salaries 27,435
Plant and machinery (cost) 160,000
Accumulated depreciation – Plant and machinery, Oct 1, 20x2 64,000
Bad debts expense 325
Sales 721,560
Furniture and equipment-factory (cost) 42,000
Accumulated depreciation – Furniture and equipment-factory, Oct 1, 20x2 8,400
Furniture and equipment-office (cost) 48,000
Accumulated depreciation – Furniture and equipment-office, Oct 1, 20x2 9,600
Raw materials, Sept 30, 20x3 6,325
Work in process, Sept 30, 20x3 6,105
Finished goods, Sept 30, 20x3 15,225
Additional information:
Prepayments at Sept 30, 20x3
Insurance 220
Rent 450
Accruals at Sept 30, 20x3
Direct wages 1,220
Telephone 70
Light, heat and power 210
Depreciation to be provided, Sept 30, 20x3
Plant and machinery 20% per year on cost
Furniture and equipment 10% per year on cost
Expenses are to apportioned to the factory as follows:
Rent 4/5
Insurances 3/4
Telephone 2/3
Light, heat and power 3/4
Income Tax rate: 35%
Required: Prepare Statement of Cost of Goods Manufactured and the Income Statement for the
year ended, Sept 30, 20x3.
End of Exam
2
BSA 13C
MIDTERM EXAM
October 11, 2023
SET A
GOD BLESS!