Dome, Jay Ann B 02-11-2021
BSA – 21 Dr. Robert Y. Co
Problem 4-1
a. Masay Company
Statement of Cost of Goods Manufactured
Year Ended XX 2020
Raw materials – January 1 P 200,000
Purchases 3,000,000
Raw materials available for use 3,200,000
Less: Raw materials – December 31 280,000
Raw materials used 2,920,000
Direct labor 950,000
Factory overhead:
Indirect labor 250,000
Superintendence 210,000
Light, heat and power 320,000
Rent – factory building 120,000
Repair and maintenance – machinery 50,000
Factory supplies used 110,000
Depreciation – machinery 60,000 1,120,000
Total manufacturing cost 4,990,000
Goods in process – January 1 240,000
Total Cost of goods in process 5,230,000
Less: Goods in process – December 31 (170,000)
Cost of goods manufactured 5,060,000
Cost of Goods Sold Method
b. Masay Company
Income Statement
Year ended XX 2020
Note
Net sales revenue (1) P 7,450,000
Cost of goods sold (2) (5,120,000)
Gross income 2,330,000
Other income (3) 210,000
Total income 2,540,000
Expenses:
Distribution Costs (4) 830,000
Administrative Costs (5) 590,000
Other losses (6) 300,000 1,720,000
Income before tax 820,000
Income tax expense (320,000)
Net income P 500,000
Note 1 – Net sales revenue
Sales P 7,500,000
Sales returns and allowances (50,000)
Net sales revenue P 7,450,000
Note 2 – Cost of goods sold
Cost of goods manufactured P 5,060,000
Finished Goods, beg. 360,000
Goods available for sale 5,420,000
Finished goods, end (300,000)
Cost of goods sold P 5, 120,000
Note 3 – Other income
Interest income P 10,000
Gain on sale of equipment 100,000
Gain from expropriation of Assets 100,000
Other Income P 210,000
Note 4 – Distribution Costs
Sales salaries P 400,000
Advertising 160,000
Depreciation - store equipment 70,000
Delivery expenses 200,000
Distribution Costs P 830,000
Note 5 – Administrative Costs
Office salaries P 150,000
Depreciation – office equipment 40,000
Accounting and legal fees 150,000
Office expenses 250,000
Administrative Costs P 590,000
Note 6 – Other Losses
Earthquake Loss P 300,000
Other losses P 300,000
Nature of expense method
c. Masay Company
Income Statement
Year Ended XX 2020
Notes
Net Sales (1) P 7,450,000
Other Income (2) 210,000
Total Income 7,660,000
Expenses:
Decrease in Inventory (3) P 130,000
Raw Materials Used (4) 2,920,000
Salaries (5) 550,000
Depreciation (6) 110,000
Advertising 160,000
Office Expenses 250,000
Delivery Expenses 200,000
Product Cost (7) 2,070,000
Accounting and Legal fees 150,000
Other Losses (8) 300,000 6,840,000
Income before Tax 820,000
Income Tax (320,000)
Net Income P 500,000
Note 1 – Net Sales Revenue
Sales P 7,500,000
Sales Return and Allowance 50,000
Net Sales Revenue P 7,450,000
Net 2 – Other Income
Interest Income P 10,000
Gain on sale of equipment 100,000
Gain from expropriation of Assets 100,000
Other Income P 210,000
Note 3 – Decrease in finished goods and goods in process
Decrease Beg. End.
Finished Goods 60,000 P 360,000 P 300,000
Good in Process 70,000 240,000 170,000
Total Decrease 130,000 P 600,000 P 470,000
Note 4 – Raw materials used
Raw Materials, beg. P 200,000
Purchases 3,000,000
Raw Materials, end. 280,000
Raw Materials Used P 2,920,000
Note 5 – Salaries
Sales salaries P 400,000
Office salaries 150,000
Salaries P 550,000
Note 6 – Depreciation
Depreciation – store equipment P 70,000
Depreciation – office equipment 40,000
Depreciation P 110,000
Note 7 – Product Costs
Direct Labor P 950,000
Factory Overhead:
Indirect labor 250,000
Superintendence 210,000
Light, heat and power 320,000
Rent – factory building 120,000
Repair and maintenance – machinery 50,000
Factory supplies used 110,000
Depreciation – machinery 60,000
Product Costs P 1,120,000
Note 8 – Other Losses
Earthquake loss P 300,000
Other Losses P 300,000
