Question:

ABC company produces product A only. The company applies deductible VAT method at
VAT rate of 10% and perpetual inventory system. The following information is available
(CU: 1.000VND)
A. Balance at 31/03/N:
Acc.154: X1
Acc. 155: 550.000 (amount: 110 products)
B. Transactions incurred in quarter 2 are as follows:
Cost items Total Abnormal cost
1. Direct material cost X2 10%
2. Direct labor cost X3 8%
3. Manufacturing overhead cost X4 20%
Total
4. In quarter 4/N, the company had produced 850 finished products, in which: X5 products
were put into the warehouse, X6 products were sent on consignments and X7 products
were sold immediately (Unit price: X8 per product). Ending balance of Acc.154: 250.000.
5. During the quarter, the company issued and sold X9 products (Unit price: X8 per
product).
6. At the end of quarter, all goods sent on consignment were sold and the consignee had
made the payment via bank after deducting commission fee at 2% on revenue (VAT rate:
10%) (Unit price: X8 per product).
7. Put into warehouse 20 returned goods with the cost of X10. The company had transferred
back to the customers.
8. Contributed a fixed asset in a joint – venture. Historical cost: 120.000, accumulated
depreciation: 30.000. The fixed asset was revaluated at: 100.000. Useful life: 7 years.
9. Other selling expenses incurred: X11
10. Administrative expenses incurred: X12
Requirements:
1. Give reasonable value from X1 to X12 for profitable business results and make journal
entries (including closing entries and business result determination entries). Assumed that
profit before CIT equals to taxable income. CIT rate is at 20% and the company applies
FIFO method for calculating cost of goods sold.
2. Prepare Income Statement for Quarter 2/N