SOLUTIONS FOR CHAPTER 5

Exercise 1:
1. Make journal entries:
1: Used for calculating COFG
2: Purchased on credit material:
DR AC 152 1,800,000
DR AC 133 180,000
CR AC 331 1,980,000
3: Actual cost of material used for production process
DR AC 621 2,100,000
CR AC 152 2,100,000
4: Direct labor cost:
DR AC 622 260,000
CR AC 334, 335, 338 260,000
5: Manufacturing overhead cost 320,000:
DR AC 627 320,000
CR related AC 320,000
6: Unused material was still at production process:
DR AC 621 (200,000)
CR AC 152 (200,000)
 Transfer production costs to calculate cost of finished goods:
 Direct materials allocated to cost of finished goods : 2,100,000 – 200,000 =
1,900,000
 Overhead allocated to cost of finished goods = 200,000*80% = 160,000
 Overhead unallocated to cost of finished goods = 40,000
= 200,000*80% = 160,000
DR AC 154 1,900,000 + 260,000 + 120,000 + 160,000 = 2,440,000
DR AC 632 40,000
CR AC 621 1,900,000
CR AC 622 260,000
CR AC 627 320,000
 Calculate cost of finished goods (Requirement 2)
Total COFG = OB of WIP + Costs inccured – CB of WIP
= 180,000 + 2,440,000 – 300,000 = 2,320,000
Unit COFG = 2,320,000/1000 = 2,320 per unit
CALCULATION FOR COST OF FINISHED GOODS
Quantity: 1000 units
 Items OB of WIP Cost CB of WIP Total Unit
inccured COFG COFG
Direct materials 180,000 1,900,000 300,000 1,780,000 1,780
Direct labours - 260,000 - 260,000 260
Overheads - 280,000 - 280,000 280
Total 180,000 2,440,000 300,000 2,320,000 2,320
7: Finished goods put in the warehouse and sent on consignment:
DR AC 155 2,320*700 = 1,624,000
DR AC 157 (Company C) 2,320*300 = 696,000
CR AC 154 2,320,000
8: Used for calculating cost of finished goods.

Exercise 2:
1. Make journal entries::
1: Opening balance of work in progress:
DR AC 631 180,000
CR AC 154 180,000
2: Openning balance of material at the warehouse:
DR AC 611 1,100,000
CR AC 152 1,100,000
3: Material purchased outside and put into the warehouse:
DR AC 611 1,800,000
DR AC 133 180,000
CR AC 331 1,980,000
4: Direct labor cost:
DR AC 622 260,000
CR AC 334,335,338 260,000
5: Manufacturing overhead cost:
DR AC 627 320,000
CR related AC 320,000
6: Cost of ending inventory:
DR AC 152 1,000,000
CR AC 611 1,000,000
7:
 Cost of direct material issued to produce goods :
1,100,000 + 1,800,000 – 1,000,000 = 1,900,000
 Overhead allocated to cost of finished goods = 200,000*80% = 160,000
  Overhead unallocated to cost of finished goods = 40,000
= 200,000*80% = 160,000
DR AC 631 1,900,000 + 260,000 + 120,000 + 160,000 = 2,440,000
DR AC 632 40,000
CR AC 621 1,900,000
CR AC 622 260,000
CR AC 627 320,000
 Calculate cost of finished goods (Requirement 2)
Total COFG = OB of WIP + Costs inccured – CB of WIP
= 180,000 + 2,440,000 – 300,000 = 2,320,000
Unit COFG = 2,320,000/1000 = 2,320 per unit
CALCULATION FOR COST OF FINISHED GOODS
Quantity: 1000 units
Items OB of WIP Cost CB of WIP Total Unit
inccured COFG COFG
Direct materials 180,000 1,900,000 300,000 1,780,000 1,780
Direct labours - 260,000 - 260,000 260
Overheads - 280,000 - 280,000 280
Total 180,000 2,440,000 300,000 2,320,000 2,320
8:
DR AC 154 300,000
CR AC 631 300,000
DR AC 632 2,320,000
CR AC 631 2,320,000

Requirment 2:
GENERAL LEDGER
For year N
Account: Cost of finished goods
Code: 631
CU:1.000VND
Voucher Journal Counter Amount
Date Descriptions
No. Date page AC DR CR
- Opening balance 0
- Arising amount
 Transfer opening balance 154 180,000
Transfer direct materials 621 1,900,000
Transfer direct labours 622 260,000
Transfer overheads 627 280,000
Production finished 632 2,320,000
Transfer closing balance 154 300,000
- Total amount 2,620,000 2,620,000
- Closing balance 0

Exercise 3:
Requirement 1 and 2: Calculate COFG and make journal entries:
1, Issued materials:
DR AC 621 620,000
DR AC 627 100,000
CR AC 152 720,000
2, Issued tools:
DR AC 627 7,000
DR AC 641 5,000
CR AC 153 12,000
3, Disposed a fixed asset:
- Removed the FA from accounting books:
DR AC 214 250,000
DR AC 811 50,000
CR AC 211 300,000
- Expenses of disposal:
DR AC 811 2,000
CR AC 111 2,000
- Income from disposal:
DR AC 112 33,000
CR AC 3331 3,000
CR AC 711 30,000
4, Salary payables:
DR AC 622 500,000
DR AC 627 100,000
DR AC 641 60,000
DR AC 642 80,000
CR AC 334 740,000
=> Salary related compensations:
DR AC 622 117,500
DR AC 627 23,500
DR AC 641 14,100
DR AC 642 18,800
DR AC 334 77,700
CR AC 3382 14,800
CR AC 3383 129,500
CR AC 3384 33,300
CR AC 3386 14,800
5, Depreciation cost incurred in the period:
DR AC 627 240,000
DR AC 641 70,000
DR AC 642 50,000
CR AC 214 360,000
6, Cash paid for outsourcing services expenses:
DR AC 627 32,000
DR AC 641 10,000
DR AC 642 14,000
CR AC 111 56,000
7, * Costs accumulation:
- Direct materials: 620,000
- Direct labours: 500,000 + 117,500 = 617,500
- Overheads: 100,000 +7,000 + 100,000 + 23,500 + 240,000 + 32,000 = 502,500
- Selling expenses: 5,000 + 60,000 + 14,100 +70,000 +10,000 = 159,100
- Administrative expenses: 80,000 + 18,800 + 50,000 + 14,000 = 162,800
Total COFG = 350,000 + (620,000 + 617,500 + 502,500) – 899,000 = 1,191,000
 Unit COFG = 1,191,000/500 = 2,382
* Put 300 finished goods in the warehouse:
DR AC 155 2,382*300 = 714,600
CR AC 154 714,600
*Sent 200 goods on consignment:
DR AC 157 2,382*200 = 476,400
CR AC 154 476,400
8, Sale in cash:
+ Cost of goods sold:
Unit COGS = (106,000 + 714,600)/(20 + 300) = 2,564.375
 DR AC 632 2,564.375*150 = 384,656.25
CR AC 155 384,656.25
+ Revenue:
DR AC 111 660,000
CR AC 3331 60,000
CR AC 511 600,000
9, Half of goods sent on consignment were sold:
- Commission fees = 2%*100*4,000 = 8,000
- VAT of commission fees = 800
- Receivables after deducting commission fees and VAT tax = 100*4,000*1.1 –
8,000 = 431,200
DR AC 111 431,200
DR AC 6417 8,000
DR AC 133 800
CR AC 511 400,000
CR AC 3331 40,000
- Cost of goods on consignment sold:
DR AC 632 238,200
CR AC 157 238,200
10, Received 10 returned products:
- Sale returns:
DR AC 5212 40,000
DR AC 3331 4,000
CR AC 111 44,000
- Cost of returned goods:
DR AC 155 25,643.75
CR AC 632 25,643.75
Requirement 3: Calculate business result for quarter IV year N.
a. Transfer revenue deduction to calcualte net revenue
Dr Ac 511 40,000
Cr Ac 521 40,000
 Net revenue = 600,000 + 400,000 – 40,000 = 960,000
b. Transfer net revenue to calculate business result:
Dr Ac 511 960,000
Cr Ac 911 960,000
c. COGS = 384,656.25 + 238,200 – 25,643.75 = 597,212.5
Transfer COGS to calculate business result:
Dr Ac 911 597,212.5
Cr Ac 632 597,212.5
d. Transfer selling expenses to calculate business result:
Dr Ac 911 167,100
Cr Ac 641 159,100 + 8,000 = 167,100
e. Transfer administrative expenses to calculate business result:
Dr Ac 911 162,800
Cr Ac 642 162,800
f. Transfer other income to calculate business result:
Dr Ac 711 30,000
Cr Ac 911 30,000
g. Transfer other expenses to calculate business result:
Dr Ac 911 52,000
Cr Ac 811 52,000
h. Calculate PBT:
PBT = (960,000 – 597,212.5) – 167,100 – 162,800 + 30,000 – 52,000
= 10,887.5
i. Calculate CIT expense:
CIT expense = 10,887.5* 20% = 2,177.5
Dr Ac 8211 2,177.5
Cr Ac 3334 2,177.5
j. Transfer CIT expense to calculate business result:
Dr Ac 911 2,177.5
Cr Ac 8211 2,177.5
k. Calculate PAT
PAT = 10,887.5 – 2,177.5 = 8,710
Dr Ac 911 8,710
Cr Ac 4212 8,710
 INTERIM INCOME STATEMENT
For Quarter I year N
CU:1000VND
Quarter I Accumulated to
quarter I
Items Code Note
Curent Prior year Current Prior year
year year
1 2 3 4 5 6 7
1. Revenues from sales and 1,000,000 1,000,000
service provisions
2. Revenue deductions 40,000 40,000
3. Net revenues from sales and 960,000 960,000
service provisions
4. Costs of goods sold 597,212.5 597,212.5
5. Gross revenues from sales 362,787.5 362,787.5
and service provisions
6. Financial income 0 0
7. Financial expense 0 0
In which: Interest expense 0 0
8. Selling expense 167,100 167,100
9. Enterprise administrative 162,800 162,800
expense
10. Net profit from operations 32,887.5 32,887.5
11. Other income 30,000 30,000
12. Other expenses 52,000 52,000
13. Other profit (22,000) (22,000)
14. Profit before CIT tax 10,887.5 10,887.5
15. Current CIT expense 2,177.5 2,177.5
16. Deferred CIT expense 0 0
17. Profits after CIT tax 8,710 8,710
18. Basic EPS 0 0
19. Deluted EPS 0 0
Exercise 4:
Requirement 1: Calculate cost of goods sold and make journal entries:
1,2,3: Costs accumulation:
- DR AC 621 2,400,000
CR AC 152, 331,111… 2,400,000
- DR AC 622 1,176,000
CR AC 334,335,338 1,176,000
- DR AC 627 590,000
CR related AC 590,000
4. Calculate cost of finished goods:
 Overhead allocated to cost of finished goods = 330,000* 500/625 = 264,000
 Overhead unallocated to cost of finished goods = 330,000 – 264,000 = 66,000
DR AC 154 4,100,000
DR AC 632 66,000
CR AC 621 2,400,000
CR AC 622 1,176,000
CR AC 627 590,000
Total COFG = 280,000 + 4,100,000 – 255,000 = 4,125,000
 Unit COFG = 4,125,000/500 = 8,250
 300 products were put in the warehouse:
DR AC 155 300*8,250 = 2,475,000
CR AC 154 2,475,000
 200 products were sent on consignment:
DR AC 157 200*8,250 = 1,650,000
CR AC 154 1,650,000
5. * Sold in cash 302 products:
- COGS:
Unit COGS = (600,000 + 2,475,000)/(75 + 300) = 8,200
DR AC 632 8,200*302 = 2,476,400
CR AC 155 2,476,400
- Revenue:
DR AC 111 4,318,600
CR AC 511 302*13,000 = 3,926,000
CR AC 3331 392,600
* Donated 20 products:
DR AC 811 8,200*20 = 164,000
CR AC 155 164,000
6. At the end of quarter, 70% of goods sent on consignment were sold by cash at bank
after deducting commission fee at 2% on revenue (VAT rate: 10%):
- COGS = 70%*200*8,250 = 1,155,000
DR AC 632 1,155,000
CR AC 157 1,155,000
- Revenue:
+ Commission fee = 140*13,000*2% = 36,400
+ VAT of commission fee = 3,640
+ Receivables from selling goods on consignment after deducting commission fee
= 140*13,000*1,1 – 36,400 – 3,640 = 1,961,960
DR AC 112 1,961,960
DR AC 641 36,400
DR AC 133 3,640
CR AC 511 1,820,000
CR AC 3331 182,000
7. Put into warehouse 5 returned goods:
- Sale returns:
DR AC 5212 5*13,000 = 65,000
DR AC 133 6,500
CR AC 112 71,500
- Cost of returned goods:
DR AC 155 5*8,200 = 41,000
CR AC 632 41,000
8. Selling expenses incurred:
DR AC 641 350,000
CR related AC 350,000
9. Administrative expenses incurred:
DR AC 642 410,000
CR related AC 410,000
10. Calculate business result for quarter IV year N.
a. Transfer revenue deductions to calculate net revenue
Dr Ac 511 65,000
Cr Ac 521 65,000
Net revenue = 3,926,000 + 1,820,000 – 65,000 = 5,681,000
b. Transfer net revenue to calculate business result:
Dr Ac 511 960,000
Cr Ac 911 960,000
c. COGS = 2,476,400 + 1,155,000 – 41,000 = 3,590,400
Transfer COGS to calculate business result:
Dr Ac 911 3,590,400
Cr Ac 632 3,590,400
d. Transfer selling expenses to calculate business result:
Dr Ac 911 386,400
Cr Ac 641 36,400 + 350,000 = 386,400
e. Transfer administrative expenses to calculate business result:
Dr Ac 911 410,000
Cr Ac 642 410,000
f. Transfer other expenses to calculate business result:
Dr Ac 911 164,000
Cr Ac 811 164,000
g. Calculate PBT:
PBT = 1,130,200
h. Calculate CIT expense:
CIT expense = 1,130,200* 20% = 226,040
Dr Ac 8211 226,040
Cr Ac 3334 226,040
i. Transfer CIT expense to calculate business result:
Dr Ac 911 226,040
Cr Ac 8211 226,040
j. Calculate PAT
PAT = 1,130,200 – 226,040= 904,160
 Dr Ac 911 904,160
Cr Ac 4212 904,160

Requirement 2: Prepare Income statement for Quarter IV/N

INTERIM INCOME STATEMENT
For Quarter IV year N
CU:1000VND
Quarter IV Accumulated to
quarter IV
Items Code Note
Curent Prior year Current Prior year
year year
1 2 3 4 5 6 7
1. Revenues from sales and 5,746,000
service provisions
2. Revenue deductions 65,000
3. Net revenues from sales and 5,681,000
service provisions
4. Costs of goods sold 3,590,400
5. Gross revenues from sales 2,090,600
and service provisions
6. Financial income -
7. Financial expense -
In which: Interest expense -
8. Selling expense 386,400
9. Enterprise administrative 410,000
expense
10. Net profit from operations 1,294,200
11. Other income -
12. Other expenses 164,000
13. Other profit (164,000)
14. Profit before CIT tax 1,130,200
15. Current CIT expense 2266,040
16. Deferred CIT expense -
17. Profits after CIT tax 904,160
18. Basic EPS -
19. Deluted EPS -