PROBLEM 1: FIGHTING Company is a manufacturing firm and has operated for twenty years now. As...

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PROBLEM 1: FIGHTING Company is a manufacturing firm and has operated for twenty years now. As a very established company, they have maintained a gross profit margin of 20% of cost and this is being implemented in present and future years as a sign that the company is indeed stable and profitable. Last year, after their physical count, it was discovered that some units worth P25,000 were still not completed and are expected to be so on the next production cycle. The warehouse also contained 1,000 units and was already in the process of shipment before the cut-off date. They were valued at P17.5 per piece. On the corner of the warehouse, a box containing materials in the amount of P18,000 was not yet used. Because of the very precise nature of production, it was always expected that the ratio of purchase and usage of direct and indirect materials is 3:1. Transactions relating to its operations for the first month are as follows: Purchased raw material on account P28,500 then put all available raw materials into production. Accrued payroll of P40,000. Upon inquiry, it discovered that there were 5 assembly workers who worked for 1,200 hours. Each worker was paid P25 per hour. Excess payroll was attributed to the salary of the supervisor who worked in the plant for 8 hours a day (there were 22 working days in a month). Electricity cost P12,000 while water cost P2,000. It was also found out that 20% of the utilities were attributed to the office where clients go and inquire. Total equipment used by the company has a historical cost of P600,000 and is being depreciated for two years already. The useful life was five years. Other overhead items cost P25,400. Then, all overhead cost was assigned to production. Goods sold on account totaled P124,800 (including those goods who were in the process of shipping). Sales agent was given 2% of commission as additional salary on top of P150 per day payment. She worked only for 20 days. The owner of the place where the office was located left a bill for the rental fee worth P5,000. At the end of the month, it was found out that there were still materials not yet used but already purchased by the company. It was worth P13,500. Also, goods costing P32,000 were ready to be sold but were still in the warehouse. REQUIRED: 1. Provide the necessary journal entries for all transactions that took place in FIGHTING Company. 2. Make an income statement with supporting schedule(s) for FIGHTING Company. PROBLEM 1: FIGHTING Company is a manufacturing firm and has operated for twenty years now. As a very established company, they have maintained a gross profit margin of 20% of cost and this is being implemented in present and future years as a sign that the company is indeed stable and profitable. Last year, after their physical count, it was discovered that some units worth P25,000 were still not completed and are expected to be so on the next production cycle. The warehouse also contained 1,000 units and was already in the process of shipment before the cut-off date. They were valued at P17.5 per piece. On the corner of the warehouse, a box containing materials in the amount of P18,000 was not yet used. Because of the very precise nature of production, it was always expected that the ratio of purchase and usage of direct and indirect materials is 3:1. Transactions relating to its operations for the first month are as follows: Purchased raw material on account P28,500 then put all available raw materials into production. Accrued payroll of P40,000. Upon inquiry, it discovered that there were 5 assembly workers who worked for 1,200 hours. Each worker was paid P25 per hour. Excess payroll was attributed to the salary of the supervisor who worked in the plant for 8 hours a day (there were 22 working days in a month). Electricity cost P12,000 while water cost P2,000. It was also found out that 20% of the utilities were attributed to the office where clients go and inquire. Total equipment used by the company has a historical cost of P600,000 and is being depreciated for two years already. The useful life was five years. Other overhead items cost P25,400. Then, all overhead cost was assigned to production. Goods sold on account totaled P124,800 (including those goods who were in the process of shipping). Sales agent was given 2% of commission as additional salary on top of P150 per day payment. She worked only for 20 days. The owner of the place where the office was located left a bill for the rental fee worth P5,000. At the end of the month, it was found out that there were still materials not yet used but already purchased by the company. It was worth P13,500. Also, goods costing P32,000 were ready to be sold but were still in the warehouse. REQUIRED: 1. Provide the necessary journal entries for all transactions that took place in FIGHTING Company. 2. Make an income statement with supporting schedule(s) for FIGHTING Company.