What is the total amount to be credited to accrued payroll

Assignment Help Financial Accounting

Reference no: EM131175210

QUESTION 1 - Manufacturing statement and income statement

See the Spreadsheet Advice PDF in Interact2 Resources and the examples in your textbook. See the requirements within the spreadsheet template below.

Check the assignment requirements below paying particular attention to the spreadsheet requirements. Ensure you have separate data and report areas showing only formulas. Use IF functions to allow for the possibility of either a net income or a net loss. Show row and column headings and paste both a normal view and a formula view.

The following information has been obtained from the books of Ponting Manufacturing Co. Ltd at 30 September, 20X7:

Inventories, 30/9/X6:

Finished Goods $300 000

Raw Materials 500 000

Work in Process: Material 80 000 Labour 30 000 OH Expense 20 000

Inventories, 30/9/X7:

Finished Goods 120 000

Raw Materials 70 000

Work in Process: Material 30 000 Labour 20 000 OH Expense 10 000

Summary of transactions for year

Raw material purchases 2 000 000

Inward Charges on raw materials 80 000

Direct labour 660 000

Manufacturing expense 200 000

Sales of finished goods 6 000 000

Advertising 45 000

Audit Fee 3 000

Discounts to debtors 10 000

Discounts from creditors 8 000

Cartage Outwards 20 000

Insurance 15 000

Light and power (Office) 28 000

General Expenses 25 000

Rates 30 000

Salaries (Office) 450 000

Salaries (Factory) 550 000

Travellers' Commission 150 000

Adjustments are to be made in respect of the following:

(a) Accrued expenses: Salaries (Office) $2000, Salaries (Factory) $3000

(b) Insurance paid in advance, $500

(d) Depreciation of factory plant, $25 000

(e) Insurance and rates are to be apportioned three-quarters to the factory and one-quarter to the office.

Required: Spreadsheet

(a) manufacturing statement for the year.

(b) income statement for the year.

QUESTION 2 - Understanding the entries in the Materials Control account with GST

The Materials Control account balances were $20 000 on 1 August and $10 000 on 31 August. Raw materials issued to production during August cost $60 000. (All direct materials).

Required: Show the Materials Control, Accounts Payable and GST Clearing accounts in the ledger for August and a general journal entry to record the cost of raw materials purchased (all on credit) during August, given that a 10% GST is paid on purchases.

QUESTION 3 - Understanding the entries in the Accrued Payroll account

Salaries and wages payable to factory employees were $10 000 on 1 March and $4000 on 31 March. Gross salaries and wages paid during March totalled $40,000. March's direct labour totalled $18 000.

Required: T-account for Accrued Payroll and general journal entries for recording salaries and wages earned by, and paid to, factory employees during March.

QUESTION 4 - Payroll entries

The Ajax Company has a gross payroll of $20,000 per day. Withholdings for PAYG taxes are $6,000 per day. There are no other deductions from employees' earnings. The firm works five days per week, Monday to Friday inclusive. The payroll period covers Thursday to Wednesday inclusive and the payroll for the week is paid on the following Friday.

Gross payroll consists of $12 000 direct labour, $3000 indirect factory labour, $3000 selling expenses and $2000 general and administrative expenses each day. The following calendar should be used to answer the questions:

(a) What is the total amount to be credited to Accrued Payroll in respect of July earnings?

(b) If balance day adjustments are performed at the end of each month, what would be the balance in Accrued Payroll account at the close of business on July 31?

(c) Suppose that a single journal entry is made on the last day of each month to record the distribution of total labour costs for the month, but that entries are made each Friday to record payment of wages and withholdings. Also, PAYG taxes withheld are remitted to the Taxation Department at the end of each month.

(i) Show the weekly journal entry.

(ii) Construct the necessary ledger accounts to show all entries in respect of labour costs during the month of July.

QUESTION 5 - Activity Based Costing

Your employer is contemplating changing the existing traditional costing systems used in the business to adopt activity based costing (ABC). See your text page 81.

Prepare a business report outlining the traditional costing system and evaluate arguments for and against ABC. Use the Internet as a resource and academic journal articles (about 400 words excluding references). The following CSU resource will help you prepare and format your report: eportfolio.csu.edu.au/pebblepad/viewasset.aspx

Or see this resource. unilearning.uow.edu.au/report/4b.html

QUESTION 6 - Service department cost allocation

Review the examples in your textbook.

Direct, step and reciprocal methods of overhead allocation: moderately difficult

A company has two production departments (Component Manufacture and Assembly) and two service departments (Staff Cafeteria and Materials Handling). The budgeted costs of these departments are:

Component Assembly Cafeteria Materials Handling
Manufacture $ $ $ $

Direct (to centre)
Material & labour 200 000 150 000 5 000 15 000
Indirect costs 120 000 110 000 3 000 5 000

The services of the Cafeteria are allocated according to the number of employees in the other departments: Materials Handling has 20 employees, Component Manufacture 50 employees and Assembly 40 employees.

The services of the Materials Handling department are allocated according to the number of budgeted requisitions per period. These are estimated as 30 for the Cafeteria, 40 for Component Manufacture and 30 for Assembly.

Required: Allocate service department costs to the production departments using

(a) the direct method

(b) the step method

You can choose if you wish to answer with a spreadsheet. Or not.

Reference no: EM131175210

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