• Exercises/Problems •

14-1 Cebu Wine Factory

1) Direct Materials: 5) Factory Cost

Raw Materials, beg. 120,000 Direct Materials 130,000

Add: Purchases 110,000 Direct Labor 308,000

Freight In 5,000 115,000 Manufacturing Overhead 225,000

Raw Materials Available for Use 235,000 Factory Cost 663,000 (C)

Less: Raw Materials, end 105,000

Direct Materials Used 130,000 (B)

2) Prime Cost 6) Cost of Goods Manufactured

Direct Materials 130,000 Direct Materials 130,000

Direct Labor 308,000 Direct Labor 308,000

Prime Cost 438,000 (A) Manufacturing Overhead 225,000

Factory Cost 663,000

Add: Work in Process, Beg. 250,000

3) Manufacturing Overhead Total Cost Placed in Process 913,000

Indirect Materials 65,000 Less: Work in Progress, End 275,000

Indirect Labor 45,000 Cost of Goods Manufactured 638,000 (A)

Amortization 50,000

Rent – Factory 25,000 7) Cost of Goods Sold

Depreciation - Factory 40,000 Cost of Goods 638,000

Manufactured

Manufacturing Overhead 225,000 (A) Add: Finished Goods, Beg. 170,000

Available for Sale 808,000

4) Conversion Cost Less: Finished Goods, End 290,000

 Direct Labor 308,000 Cost of Goods Sold 518,000 (A)

Manufacturing Overhead 225,000

Conversion Cost 533,000 (A)

14-2 Vanilla Food Processing Co.

Requirement 1: Vanilla Food Processing

Worksheet
For the year ended 31 December 20B

Cost of Statement of Financial

Trial Balance Adjustments Goods Comprehensive Position
Income
Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash in Bank P 375,000 P 375,000
Petty Cash Fund 10,000 10,000
Accounts Receivable 65,000 65,000
Finished Goods, Jan. 1 150,000 150,000
Goods in Process, Jan. 1 75,000 75,000
Raw Materials, Jan. 1 185,000 185,000
Machinery & Equipment 380,000 380,000
Accumulated P 76,000 76,000 152,000
Depreciation
Office Equipment 120,000 120,000
Accumulated 24,000 24,000 48,000
Depreciation
Franchise 315,000 35,000 280,000
Vouchers Payable 67,000 67,000
Detoya, Capital 1,692,000 1,692,000
Sales 1,350,000 1,350,000
Purchases-Raw 295,000 295,000
Materials
Direct labor 350,000 350,000
Indirect labor 285,000 285,000
Taxes & Licenses 84,000 67,200 16,800
Repairs & Maintenance 120,000 90,000 30,000
Light & Water 160,000 136,000 24,000
Office Salaries 240,000 240,000
P P3,209,000
3,209,000

Finished Goods, De. 31 350,000 350,000

Work In Process, Dec. 31 286,000 286,000
Raw Materials, Dec. 31 90,000 90,000
Depreciation- 76,000 76,000 24,000
Machinery
Depreciation-Office 24,000
Eqpt.
Amortization- 35,000 35,000
Franchise
135,000 135,000 1,594,200 376,000 376,000
Cost of Goods 1,218,200 1,218,200
Manufactured
1,703,000 1,700,000 1,956,000 1,959,000
Profit (Loss) 3,000 3,000
P1,703,00 P1,703,00 P1,959,00 P1,959,00
0 0 0 0

Requirement 2:
Vanilla Food Processing
Statement of Cost of Goods Manufactured
For the year ended December 31, 20B

Direct Materials Used:

Raw Materials, Jan. 1 P 185,000
Add: Purchases-Raw Materials 295,000
Total Cost of Raw Materials Available for Use 480,000
Less: Raw Materials, Dec. 31 __90,000 P 390,000
Direct Labor 350,000
Manufacturing Expenses:
Indirect Labor P 285,000
Taxes and Licenses 67,200
Repairs and Maintenance 90,000
Light and Water-Factory 136,000
Depreciation-Factory 76,000
Amortization-Franchise __35,000 689,200
Total Manufacturing Cost P 1,429,200
Add: Goods in Process, Jan. 1 75,000
Total Cost Placed in Process P 1,504,200
Less: Goods in Process, Dec. 31 286,000
Cost of Goods Manufactured P 1,218,200

Requirement 3:
Vanilla Food Processing
Statement of Comprehensive Income
For the year ended December 31, 20B

Sales P 1,350,000
Less: Cost of Sales
Finished Goods, Jan. 1 P 150,000
Add: Cost of Goods Manufactured 1,218,200
Total Cost of Goods Available for Sale P 1,368,200
Less: Finished Goods, Dec. 31 350,000 1,018,200
Gross Profit P 331,800
Less: Operating Expenses:
Repairs & Maintenance 16,800
Taxes & Licenses 30,000
Light & Water 24,000
Office Salaries 240,000
 Depreciation – Office Equipment 24,000 334,800
Profit (Loss) (P 3,000)

Requirement 4:
Vanilla Food Processing
Statement of Financial Position
As of 31 December 20B
Assets

Current Assets:
Cash in Bank P 375,000
Petty Cash Fund 10,000
Accounts Receivable 65,000
Finished Goods, End 350,000
Goods in Process, End 286,000
Raw Materials, End 90,000
Total Current Assets P 1,176,000

Non-Current Assets:
Machinery P 380,000
Less: Accumulated Dep’n.-Machinery 152,000 228,000
Office Equipment 120,000
Less: Accumulated Dep’n.-Office Equipment 48,000 72,000
Franchise 280,000
Total Non-Current Assets 580,000
Total Assets P 1,756,000

Liabilities & Owner’s Equity

Current Liabilities:
Vouchers Payable P 67,000
Owner’s Equity
Detoya, Capital 1,689,000
Total Liabilities & Owner’s Equity P 1,756,000

Adjusting & Closing Entries:

Requirement 5:

Dec. 31 Depreciation-Machinery P 76,000

Accumulated Depreciation-Machinery P 76,000

Depreciation-Office and Equipment P 24,000

Accumulated Depreciation-Office & Eqpt. P 24,000

Amortization-Franchise P 35,000
Franchise P 35,000

Finished Goods, Dec. 31 P 350,000

Income Summary P 350,000

Goods in Process, Dec. 31 P 286,000

Raw Materials, Dec. 31 90,000
Manufacturing Summary P 376,000

Manufacturing Summary P 555,000

Raw Materials, Jan. 1 P 185,000
 Raw Materials-Purchases 295,000
Goods in Process, Jan. 1 75,000

Manufacturing Summary P 1,039,200

Direct Labor P 350,000
Indirect Labor 285,000
Taxes & Licenses 67,200
Repairs & Maintenance 136,000
Light & Water 90,000
Depreciation-Machinery 76,000
Amortization-Franchise 35,000

Income and Expense Summary P 1,218,200

Manufacturing Summary P 1,218,200

Sales P 1,350,000
Income Summary P 1,350,000

Income Summary P 484,000

Finished Goods P 150,000
Repairs & Maintenance 16,800
Taxes & Licenses 30,000
Light & Water 24,000
Office Salaries 240,000
Depreciation-Office Equipment 24,000

Detoya, Capital P 3,000

Income & Expense Summary P 3,000