Reference no: EM132633613
JOURNAL ENTRIES - ACTUAL COST SYSTEM
The following transactions of Lakay Manufacturers were incurred during the month of May.
a. Materials purchases on account, P750,000.
b. Purchase returns and allowances, P50,000.
c. Payment of payroll:
Total Earnings P655,000
Less: SSS premiums P17,500
Philhealth premiums 8,000
Pag-IBIG premiums 2,500
Withholding taxes 12,000
Advances to employees 65,000
Union dues 30,000 135,000
Net amount P520,000
d. Breakdown of the payroll: factory, 60% (Direct labor - 50%, Superintendence - 40%; Indirect labor - 10%); sales, 25%; and, office, 15%.
e. Disbursements are made for the following:
Insurance premiums - factory building and contents P2,500
Lubricants, rags, brooms and insecticide 800
Electricity bill 4,100
Water bill 900
f. Sales on account, P2,200,000.
g. Sales returns and allowances, P60,000.
h. The following are paid:
Bond paper, pencils and other office supplies P1,500
TV and radio advertisements 6,000
Plastic bags, masking tapes and other store supplies 2,000
i. The employer's contributions for SSS, Philhealth and Pag-IBIG premiums are as follows: SSS- P20,000; Philhealth-P8,000; Pag-IBIG-P2,050) and EC premiums of P2,500. The total of these is distributed as follows: factory, 70%; sales, 15%; and office, 15%.
j. Amounts due to SSS, Philhealth and Pag-IBIG premiums are remitted together with the employer's counterpart, including payable to BIR and Union.
k. Collections from customers, P195,000.
l. Depreciation is provided on: factory building, P15,000; factory machinery and equipment, P7,000; office furniture and equipment, P5,000; delivery van, P8,000; and, store furniture, P4,200.
m. Accrual of salaries and wages: factory-P8,000 (direct labor); sales-P3,000; and, office- P2,500.
n. The following ending inventories are taken up: Raw materials - P20,000; Work in process - P15,000; Finished goods - P19,000
o. The following beginning inventories are closed: Raw materials - P18,000; Work in process - P16,000; Finished goods - P10,000
p. The remaining manufacturing accounts are closed.
q. The remaining nominal accounts are closed.
r. The net income or net loss is transferred to accumulated profits.
REQUIRED:
Problem 1: Prepare journal entries for these transaction