FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Solve the given problem: (Show your complete solution)
A mentally deranged employee, Mr. Arson, put a torch to a factory on February 20,
2018. The resulting fire completely destroyed the plant and its contents. Fortunately,
certain accounting records were kept in another building. They revealed the following for
the period December 31, 2017 to February 20, 2018:
Prime cost, P301,000
Gross Profit, P100,000 or 20% of sales
Cost of Goods Available for Sale, P460,000
Direct Materials purchased, P170,000
Work in process, December 31, 2017, P34,000
Direct materials, December 31, 2017, P16,000
Finished Goods, December 31, 2017, P30,000
Factory overhead, 40% of conversion cost
Direct Labor, P180,000
The insurance company wants to know the approximate cost of the inventories as a
basis for negotiating a settlement.
Compute for the following:
1. Direct Materials Inventory, 2/20/2018
2. Work in Process Inventory, 2/20/2018
3. Finished Goods Inventory, 2/20/2018
4. Total Manufacturing Cost
5. Indirect Materials
6. Cost of Goods Placed in Process
7. Cost of Goods Manufactured
8. Cost of Goods Sold
9. Sales
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Transcribed Image Text:Solve the given problem: (Show your complete solution) A mentally deranged employee, Mr. Arson, put a torch to a factory on February 20, 2018. The resulting fire completely destroyed the plant and its contents. Fortunately, certain accounting records were kept in another building. They revealed the following for the period December 31, 2017 to February 20, 2018: Prime cost, P301,000 Gross Profit, P100,000 or 20% of sales Cost of Goods Available for Sale, P460,000 Direct Materials purchased, P170,000 Work in process, December 31, 2017, P34,000 Direct materials, December 31, 2017, P16,000 Finished Goods, December 31, 2017, P30,000 Factory overhead, 40% of conversion cost Direct Labor, P180,000 The insurance company wants to know the approximate cost of the inventories as a basis for negotiating a settlement. Compute for the following: 1. Direct Materials Inventory, 2/20/2018 2. Work in Process Inventory, 2/20/2018 3. Finished Goods Inventory, 2/20/2018 4. Total Manufacturing Cost 5. Indirect Materials 6. Cost of Goods Placed in Process 7. Cost of Goods Manufactured 8. Cost of Goods Sold 9. Sales
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