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Income Statement and OCI - Exercises - Answer
Accountancy and Business Management (ABM001)
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Assets 970,000 1,218,
Liabilities 202,000 276,
Equity 768,000 942,
Equity, beginning xx 768,
Net Income xx x = 324,
Investment xx 100,
Withdrawal (xx) (250,000)
Equity, end xx 942,
Decrease in liabilities 250,000 P850,
Increase in share premium 125,000 525,
Increase (decrease) in retained earnings P325,
Dividends 120,
Profit for the year P445,
Raw material purchases P430,
Increase in raw materials inventory (15,000) RM beg. 10,000 vs RM end 25,
Raw materials used P415,
Direct labor 200,
Factory overhead 300,
Total manufacturing costs P915,
Increase in work in process inventory (20,000) WIP, beg 80,000 vs. WIP, end 100,
Cost of goods manufactured P895,
Decrease in finished goods 35,000 FG, beg 50,000 vs. FG, end 15,
Cost of goods sold for 2020 P930,
Cost of goods manufactured P2,720,
Finished goods, beginning 380,
Gross profit 962,
Sales P3,644,
x = .18/ sales Cost of sales = 60% x 2,800,000 = 1,680,
Sales P895,
Selling expenses (161,100)
- Problem
- Dec. 31, 2019 Dec. 31,
- Assets 970,000 1,218,
- Liabilities 202,000 276,
- Equity 768,000 942,
- Equity, beginning xx 768,
- Net Income xx x = 324,
- Investment xx 100,
- Equity, end xx 942,
- Problem
- Increase in assets P600, Debit changes
- Decrease in liabilities 250,000 P850,
- Increase in share capital P400, Credit changes
- Increase in share premium 125,000 525,
- Increase (decrease) in retained earnings P325,
- Dividends 120,
- Profit for the year P445,
- Problem
- Raw material purchases P430,
- Increase in raw materials inventory (15,000) RM beg. 10,000 vs RM end 25,
- Raw materials used P415,
- Direct labor 200,
- Factory overhead 300,
- Total manufacturing costs P915,
- Increase in work in process inventory (20,000) WIP, beg 80,000 vs. WIP, end 100,
- Cost of goods manufactured P895,
- Decrease in finished goods 35,000 FG, beg 50,000 vs. FG, end 15,
- Cost of goods sold for 2020 P930,
- Problem
- Cost of goods manufactured P2,720,
- Finished goods, beginning 380,
- Cost of goods sold P2,682, Finished goods, end (418,000)
- Gross profit 962,
- Sales P3,644,
- Problem
- .30x = .18 sales Sales = 280,000/10%; Sales = 2,800, Let x = cost of sales Therefore, 100% - 60% - 18% - 12% = 10%
- x = .18/ sales Cost of sales = 60% x 2,800,000 = 1,680,
- Problem x = .60 sales
- Sales P895,
- Beginning inventory P126, Cost of sales
- Purchases 466,
- Gross profit P492, Ending inventory (189,500) (402,750)
- Profit before income tax P202, General and administrative expenses (128,880)
- Profit P141, Income tax (60,681)
Problem 7 I. Net Sales Revenue Sales P3,529, Less sales discounts P 49, Sales returns and allowances 121,000 170, Net sales revenue P3,359,
II. Cost of Goods Sold Inventory, January 1 P341,
Purchases 466,
Add freight-in 135, Total P1,865, Less purchase discounts (41,000) Purchase returns and allowances (62,000) 1,762, Cost of goods available for sale P2,103, Less Inventory, December 31 446, Cost of goods sold P1,657,
III. Selling Expenses Sales commissions and salaries P182, Store supplies expense 135, Delivery expense 77, Advertising expense 170, Depreciation expense – store equipment 96, Total selling expenses P581,
IV. General and Administrative Expenses Bad debts expense P27, Office supplies expense 19, Insurance and taxes 85, Office salaries 320, Depreciation – buildings and office equipment 145, Total administrative expenses P596,
V. Profit (Loss) under Income Statement Net sales revenue P3,359, Cost of goods sold 1,657, Gross profit P1,702, Other Operating Income - Rent Revenue 105, Total Income P 1,807, Operating Expenses: Selling Expenses P581, General and Administrative Expenses 596, Other Operating Expenses 170, Total Operating Expenses P1,347, Profit from Operations P460, Interest expense (37,000) Profit before income tax from continuing operations P423, Income tax expense (126,900) Profit from continuing operations P296, Discontinued operations, net of tax (245,000) Profit P 51,
VI. Profit (Loss) on Discontinued Operations Revenues P 900, Expenses (1,050,000) Profit (loss) before income tax P (150,000) Income tax benefit 45, Profit (loss) from operations of discontinued operations P (105,000) Loss on sale of assets, net of tax benefit of P60,000 (140,000) Discontinued Operations P (245,000)
Income Statement and OCI - Exercises - Answer
Course: Accountancy and Business Management (ABM001)
