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Intermediate Acctg 1 Inventories9

This document appears to be an assignment for an intermediate accounting course. It contains multiple exercises asking students to: 1) Identify cost elements like direct materials, direct labor, and factory overhead for various production items. 2) Classify typical business costs as direct materials, direct labor, manufacturing expenses, selling/marketing expenses, or general/administrative expenses. 3) Calculate values like total sales, cost of goods manufactured, accounts receivable based on financial information provided. 4) Prepare an income statement for a merchandising business based on account balances. 5) Calculate the correct net income amount given inventory misstatements.

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126 views2 pages

Intermediate Acctg 1 Inventories9

This document appears to be an assignment for an intermediate accounting course. It contains multiple exercises asking students to: 1) Identify cost elements like direct materials, direct labor, and factory overhead for various production items. 2) Classify typical business costs as direct materials, direct labor, manufacturing expenses, selling/marketing expenses, or general/administrative expenses. 3) Calculate values like total sales, cost of goods manufactured, accounts receivable based on financial information provided. 4) Prepare an income statement for a merchandising business based on account balances. 5) Calculate the correct net income amount given inventory misstatements.

Uploaded by

Grace
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ADAMSON UNIVERSITY

Intermediate Accounting 1 – Midterms Assignment 5


Prof. Judith Francisco – Luna

Name _________________________________________ Section _____________ Date ____________________

Exercise A
Identify the cost element (Direct Material, Direct Labor, Factory Overhead) in each of the following:

_____________________ 1. Fruit for ice cream _____________________ 6. Meat for corned beef
_____________________ 2. Tools used _____________________ 7. Heat, Light and Water
_____________________ 3. Wages of supervisor _____________________ 8. Sugar for ice cream
_____________________ 4. Wages of cutter _____________________ 9. Dry Ice for packing
_____________________ 5. Oil for machines _____________________ 10. Perfume Bottles

Exercise B
From the following list of typical costs incurred by an RTW manufacturer, Identify the Direct Materials (DM), Direct Labor
(DL), Manufacturing Expenses (ME), Selling and Marketing Expenses (SM), and the General and Administrative Expenses
(GA).

___________ 1. Gasoline and Oil for Delivery Truck ___________ 6. Business forms used in the office
___________ 2. Telephone charges ___________ 7. Depreciation of Sewing Machine
___________ 3. Lace for the dress ___________ 8. Brand Labels
___________ 4. Tread for sewing ___________ 9. Store Furniture Repair
___________ 5. Seamstress’ salary ___________ 10. Subscription to a Daily Newspaper

C. Write the answer for each of the following items.


______________ 1. Stencil Co. reported the following data for the year 2019: gross profit – P192,000; cost of
goods manufactured – P680,000; work in process, beginning – P56,000; finished goods, beginning – P90,000;
work in process, end – P76,000; finished goods, end – P104,000. How much is total sales of the company for the
year 2019?

Data for Nos. 2 & 3


The following information were reported by Laserjet Company for the month of September, 2019:

September 1 September 30
Direct Materials 80,000 100,000
Work in process 50,000 70,000
Finished goods 120,000 140,000
Direct labor cost P240,000
Factory overhead 216,000
Cost of goods sold 756,000

_______________ 2. The total cost of direct materials purchases during September.

_______________ 3. Cost of goods manufactured during September.


Data for Nos. 4 & 5
MRCQ COMPANY situated in Manila, recorded sales of P300,000 for the merchandise sold to HO COMPANY
which is situated in Cebu. The shipment terms are FOB Manila and HO will pay for freight charges that is worth
P12,000. Both companies are not VAT-registered.

_______________4. How much Freight In should be recognized by HO?

_______________5. How much is the accounts receivable of MRCQ resulting from the transaction?

Data for Nos. 6 - 9


The following balances were taken from the trial balance of IMBP Company at year end:
Miscellaneous Expense P 1,000
Utilities Expense 15,000
Transportation-In 12,000
Purchase Discounts 19,600
Depreciation Expense – Office 10,000
Depreciation Expense – Store 8,000
Store Supplies Expense 6,000
Advertising Expense 30,000
Interest Income 21,200
Rent Expense 50,000
Sales Returns and Allowances 12,000
Purchases 400,000
Inventory, beginning 90,000
Inventory, end 75,000
Office Supplies Expense 5,000
Sales Discounts 6,000
Transportation-out 6,000
Gross Profit is 30% of Net Sales
Rent Expense of 40% is attributable to the store.
Utilities Expense of 50% is attributable to the store.
Note: Prepare an Income Statement for a Merchandising Business.
____________________6. How much is cost of goods available for sale?

____________________7. How much is gross sales?

____________________8. How much is operating income?

____________________9. How much is net income?

10. PIOS AUTOMOBILES CO. reported net income of P20,000,000 at December 31, 2019. However, a review of
the inventory records reveal that the January 1, 2019 inventory was overstated by P2,000,000 and the
December 31, 2019 inventory was understated by P4,000,000.

The correct net income for December 31, 2019 should be? ____________________

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