PROBLEM 5 INCOME STATEMENT OF A MANUFACTURING COMPANY

The beginning balances of Luke Steel Manufacturing Company is presented as follows:

Beginning Balances Ending Balances

Raw Materials P 400,000 P 350,000

Work In Process 500,000 420,000

Finished Goods 700,000 600,000

Transactions that transpired during the month were:

1. Raw materials amounting to P40,000 were purchased in cash.

2. Purchase Raw Materials costing P100,000 on account.

3. Rental during the period: 50% Office; 50% Factory, amount, P150.000

4. Depreciation Expense: P15,000 Office Equipment; P25,000 Machineries and Equipment

5. Utilities incurred P25,000

6. Paid Office Salaries, P10,000

7. Indirect Materials used P50,000

8. Factory labor used consisted of: Direct Labor P 270,000 Indirect Labor 100,000

9. Finished goods sold amounts to P 1,520,000 10. Office supplies expenses, P2,500

A. Compute for the following: (10 pts)

1. Raw Materials used( prepare schedule)

2. Manufacturing cost ( prepare schedule)

3. Cost of Goods Manufactured ( prepare schedule)

4. Cost of Goods Sold ( prepare schedule)

5. Gross Profit ( prepare schedule)

B. Prepare the Income Statement of Luke Steel Manufacturing Company for the first quarter of 2020.( prepare schedule)