Test I- Instruction: Indicate whether each of the following costs associated with production would be classified as Direct Materials, Direct Labor or Manufacturing Overhead.

1. Hourly workers assembling goods
2. Grease used to maintain machines
3. Factory property taxes
4. Bike frame used to build a racing bike
5. Salaried supervisor responsible for several product lines
6. Depreciation on production equipment
7. Factory utilities
8. Salary for salespeople
9. Factory insurance
10. Salary of chief financial officer
11. Raw materials used in production easily traced to a product
12. Computer equipment depreciation for accounting department
13. Production line workers salary
14. Glue used to assemble toys
15. Insurance for factory equipment

Test II- Preparation of Adjusting Journal Entries

Direction: Prepare adjusting entries required on December 31 for each item with your supporting computations after each entry. (5 points each correct entry with correct computations)

16. On March 1, 2020, XYZ paid P54,000 for two-year insurance premium on property. The bookkeeper debited Prepaid Insurance account at the time of payment.

17. On December 1, 2020, ABC company received P120,000 as advance payment for professional services to be rendered starting 1^st quarter of 2021. Unearned Revenue was credited at the time of deposit.

18. Office Supplies were purchased in the last quarter of 2020 amounting to P6,500. On December 31, inventories showed that P3,200 were on hand. The purchase was debited to Office Supplies account.

19. The companys office equipment costing P100,000 is expected to have 10 years economic life with no salvage value. This was purchased by the company on August 1, 2020.

20. ZTE company owes a bank a 10%, 90-day note for P150,000 dated November 1, 20

Test III- Preparation of Schedules and Income Statement

ABC Company has the following costs and expenses for the year December 31, 2020.

Raw Materials, 1/1/2020	P40,000	Insurance, Factory	P14,000
Raw Materials, 12/1/2020	P25,000	Property Taxes, Factory Building	P6,000
Raw Materials Purchases	P305,000	Sales Revenue	P2,000,000
Work-in-Process, 1/1/2020	P60,000	Delivery Expenses	P50,000
Work-in-Process, 12/1/2020	P40,000	Sales Commissions	P100,000
Finished Goods, 1/1/2020	P120,000	Indirect Labor	P55,000
Finished Goods, 12/31/2020	P110,000	Indirect Material	P105,000
Direct Labor	P400,000	Factory Machinery, Rent	P25,000
Factory Managers Salary	P25,000	Factory Utilities	P55,000
Depreciation, Office Equipment	P25,000	Administrative Expense	P250,000

Requirement:

1. Prepare a cost of goods manufactured schedule for ABC Company for 2020. (10 points)
2. Prepare cost of goods sold schedule for ABC Company for 2020. (5 points)
3. Prepare Income Statement for ABC Company. (15 points)