2. MATERIALS INVENTORY
- made up of the balances of materials
and supplies on hand
WORK IN PROCESS INVENTORY
- cost of goods that were started in process but is not yet
completed
FINISHED GOODS INVENTORY
- cost of goods already completed but not yet sold
9. ◦ Materials are purchased on account at a cost of
50,000
Materials 50,000
Accounts Payable 50,000
10. Direct materials costing P40,000 and indirect
materials costing P1,900 are issued to the
factory
Work in Process 40,000
Factory overhead control 1,900
Materials 41,900
11. Total payroll amounted to P36,000 consisting
of P20,000 earned by laborers , P7,000 for
factory supervision, P9,000 for sales and
administrative employees
Payroll 36,000
Accrued Payroll 36,000
Accrued Payroll 36,000
Cash 36,000
12. Recording the distribution or classification of
the payroll
Work in process 20,000
Factory overhead control 7,000
Selling and administrative expenses control 9,000
Payroll 36,000
13. Depreciation expense for the building is
P3,750. The office occupies 1/10 of the
building and the factory occupies 9/10 of the
building
Factory overhead control 3,375
Selling and administrative expenses control 375
Accumulated depr- building 3,750
14. Depreciation for machinery and equiment
used in the factory is 2,500
Factory overhead control 2,500
Accum. Depr. – machinery and equipment 2,500
15. The cost of heat, light and power for the
month was P3,000. 1/10 is allocated to the
office and 9/10 to the factory
Factory overhead control 2,700
Selling and administrative expenses control 300
Accounts payable 3,000
16. Miscellaneous expenses for telephone, office
supplies, travel and rental of office furniture
and equipment totaled
Selling and administrative expenses control 1,500
Accounts payable 1,500
17. Factory overhead is charged to production at
85% of direct labor cost
Work in process 17,000
Factory overhead applied 17,000
18. Assuming all goods started in process have
been finished
Finished goods 77,000
Work in process 77,000
Direct materials 40,000
Direct labor 20,000
Factory overhead 17,000
77,000
19. All the finished goods were sold with a mark-
up of 10,000 pesos on credit
Accounts receivable 87,000
Sales 87,000
Cost of goods sold 77,000
Finished goods 77,000
20. All the accounts receivable were collected in
full
Cash 87,000
◦ Accounts receivable 87,000
