The statement of financial position will practically be the same as that of the merchandising business except for the following: Current assets will include 4 inventory accounts instead of just one.

Non current assets will include machinery and equipment accounts

PROBLEM 2:

Manufacturing costs and other accounts of Sports Manufacturing Company appeared in its December 31, 2020 trial balance as follows:

The statement of financial position will practically be the same as that of the merchandising business except for the following: Current assets will include 4 inventory accounts instead of just one.

Non current assets will include machinery and equipment accounts

PROBLEM 2:

Manufacturing costs and other accounts of Sports Manufacturing Company appeared in its December 31, 2020 trial balance as follows:

Sales Raw Material Purchases Direct Labor Sales Salaries Office Supplies Used	P5,150,000 1,200,000 1,500,000 120,000 7,850	Sales Allowances Freight In Factory Heat, Light & Power Advertising Expense Delivery Expense	P25,000 28,000 1,750,000 150,000 60,000
Machine Repairs	12,250	Office Salaries	80,000
Supervision	75,000	Indirect Materials	15,500
Sales Returns & Allowances	18,500	Purchases Discount	14,400

Inventories: Dec 31, 2020 January 1, 2020

Finished Goods Work In Process Materials

P250,000 78,500 95,000

P320,000 65,000 88,000

Compute for the

a) Total manufacturing costs

b) Cost of goods manufactured

3. Cost of goods sold
4. Gross profit
5. Net taxable income
6. Net income after a 30% tax rate

VERA CRUZ FURNITURE SHOP INCOME STATEMENT For the year ended December 31, 2020 Sales Less Cost of Goods Sold (Schedule 2) Gross Profit Less Operating Expenses: Selling (Schedule 3) P91,075 Administrative (Schedule 4) 78,975 Total Operating Expenses NET INCOME P500,000 278,918 221,082 170,050 P 51,032 Schedule 2: Finished Goods Inventory, Beginning Add Cost of Goods Manufactured Total Goods Available for Sale Less Finished Goods Inventory, End Cost of Goods Sold 19,250 273,918 293,168 14,250 P278,918 Schedule 3: Selling Expenses: Salesmen Salaries & Commissions Advertising Freight Out Depreciation, Store Equipment Rent Light and Power SSS Premium Expense Phil Health Premium Expense HDMF Premium Expense Total P45,000 15,000 12,000 7,000 7,500 1,875 1,350 900 450 P 91,075 Schedule 4: Administrative Expenses Office & Officers' Salaries Bad Debts Depreciation, Office Equipment Rent Office Supplies Used Light and Power Expense SSS Premium Expense Phil Health Premium Expense HDMF Premium Expense Total P40,000 12,200 12,000 7,500 3,000 1,875 1,200 800 400 P78,975 VERA CRUZ FURNITURE SHOP INCOME STATEMENT For the year ended December 31, 2020 Sales Less Cost of Goods Sold (Schedule 2) Gross Profit Less Operating Expenses: Selling (Schedule 3) P91,075 Administrative (Schedule 4) 78,975 Total Operating Expenses NET INCOME P500,000 278,918 221,082 170,050 P 51,032 Schedule 2: Finished Goods Inventory, Beginning Add Cost of Goods Manufactured Total Goods Available for Sale Less Finished Goods Inventory, End Cost of Goods Sold 19,250 273,918 293,168 14,250 P278,918 Schedule 3: Selling Expenses: Salesmen Salaries & Commissions Advertising Freight Out Depreciation, Store Equipment Rent Light and Power SSS Premium Expense Phil Health Premium Expense HDMF Premium Expense Total P45,000 15,000 12,000 7,000 7,500 1,875 1,350 900 450 P 91,075 Schedule 4: Administrative Expenses Office & Officers' Salaries Bad Debts Depreciation, Office Equipment Rent Office Supplies Used Light and Power Expense SSS Premium Expense Phil Health Premium Expense HDMF Premium Expense Total P40,000 12,200 12,000 7,500 3,000 1,875 1,200 800 400 P78,975