Problem 1 – Riverside Company

1 Journal entries
1. Materials 70,000
Accounts payable 70,000

2. Work in process 55,000

Job 401 P13,750
Job 402 P17,500
Job 403 P23,750
Factory overhead control 7,500
Materials 62,500

3. Materials 2,000
Work in process 1,250
Job 403 P1,250
FO Control 750

4. Accounts payable 2,500

Materials 2,500

5. Payroll 82,000
Withholding taxes payable 7,562.50
SSS Premiums payable 4,000
Phil Health contributions payable 937.50
Pag-ibig funds contributions payable 3,000
Accrued payroll 66,500

Accrued payroll 66,500

Cash 66,500

6. Work in process 73,500

Job 401 P26,000
Job 402 P21,250
Job 403 P26,250
Factory overhead control 8,500
Payroll 82,000

Note: change direct labor cost for Job 402 from P31,250 to P21,250.

7. Factory Overhead Control 8,937.50

SSS Premiums payable 5,000
Phil Health cont. payable 937.50
Pag-ibig cont. payable 3,000
 8 FO Control 37,500
Accum Depr. 7,500
Prepaid ins. 2,375
Accounts payable 27,625

9. Work in process 58,800

FO Applied 58,800

10. Finished goods 162,550

WIP 162,550
Job 401 79,300
Job 402 83,250

11. Accounts receivable 111,020

Sales (79,300 x 140%) 111,020

Cost of goods sold 79,300

FG 79,300

12. Cash 87,500

Accounts receivable 87,500

13. Factory overhead applied 58,800

Cost of goods sold 2,887.50
Factory overhead control 61,687.50

Job 401
Direct materials Direct labor Factory overhead
7,500 6,250 5,000
13,750 26,000 20,800
21,250 32,250 25,800

Job 402
Direct materials Direct labor Factory overhead
14,000 7,500 6,000
17,500 21,250 17,000
31,500 28,750 23,000

Job 403
 Direct materials Direct labor Factory overhead
23,750 26,250 21,000
( 1,250)

3. Cost of goods sold statement

Direct materials used

Materials, August 1 55,000
Purchases 70,000
Less. Purchase returns 2,500 67,500
Total available for use 122,500
Less: Materials, Aug. 31 62,000
Ind. Materials (7,500-750) 6,750 68,750 53,750
Direct labor 73,500
Factory overhead 58,800
Total manufacturing costs 186,050
Work in process, Aug. 1 46,250
Cost of goods put into process 232,300
Less: Work in process, Aug. 31 69,750
Cost of goods manufactured 162,550
Finished goods, Aug. 1 62,500
Total goods available for sale 225,050
Less: Finished goods, Aug. 31 145,750
Cost of goods sold - normal 79,300
Add. Under applied factory overhead 2,887.50
Cost of goods sold 82,187.50

Problem 8 – Cornerstone Company

1) Job 101 P 218,750
Job 102 150,000
WP, July 1 P 368,750

2) Job 101 100,000 x 125% = P 125,000

Job 102 118,750 x 125% = 148,437.50
Job 103 143,750 x 125% = 179,687.50
Total 453,125

3) Job 101 Job 102 Total

WP, beg. 218,750 150,000 368,750
Cost added
Materials 68,750 100,000 168,750
Labor 100,000 118,750 218,750
Overhead 125,000 148,437.50 273,437.50
Total 512,500` 517,187.50 1,029,687.50

4) Job 101 512,500

Add: Under-applied factory overhead
Actual FO 468,750
Less: Applied FO 453,125 15,625
Cost of goods sold – actual 528,125`

5) FG, Inventory July 31 (Job 102) 517,187.50

6) WP, Inventory, July 31 ( Job 103)

Materials 115,000
Labor 143,750
Factory overhead 179,687.50
Total WP Inventory, July 31 438,437.50