1. BEST Manufacturing Company uses Raw and In Process (RIP) inventory account, and charges all conversion costs to cost of sales. At the end of the month, all inventories are counted, their conversion costs component are estimated, and inventory account balances are adjusted. Raw materials cost is backflush from RIP to Finished Goods and to cost of sales. The following information is available for the current month: RIP, beginning including P14,000 conversion costs. RIP, end including conversion costs of P12,000 FG, beginning including P8,500 of conversion costs FG, end including conversion P10,000 of conversion costs Raw Material purchases for the period Conversion costs for the period P35,000 48,000 52,000 60,000 750,000 900,000

1. BEST Manufacturing Company uses Raw and In Process (RIP) inventory account, and charges all conversion costs to cost of sales. At the end of the month, all inventories are counted, their conversion costs component are estimated, and inventory account balances are adjusted. Raw materials cost is backflush from RIP to Finished Goods and to cost of sales. The following information is available for the current month: RIP, beginning including P14,000 conversion costs. RIP, end including conversion costs of P12,000 FG, beginning including P8,500 of conversion costs FG, end including conversion P10,000 of conversion costs Raw Material purchases for the period Conversion costs for the period P35,000 48,000 52,000 60,000 750,000 900,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

I. BEST Manufacturing Company uses Raw and In Process (RIP) inventory account, and
charges all conversion costs to cost of sales. At the end of the month, all inventories are
counted, their conversion costs component are estimated, and inventory account balances are
adjusted. Raw materials cost is backflush from RIP to Finished Goods and to cost of sales. The
following information is available for the current month:
RIP, beginning including P14,000 conversion costs.
RIP, end including conversion costs of P12,000
FG, beginning including P8,500 of conversion costs
FG, end including conversion P10,000 of conversion costs
Raw Material purchases for the period
Conversion costs for the period
P35,000
48,000
52,000
60,000
750,000
900,000
Requirement:
1. Give the final entry to adjust the inventory accounts at the end of the period.
2.How much is the Cost of Sales, adjusted?
3. How much is backflushed from RIP to FG (materials)?
4. How much is backflushed from FG to Cost of Sales (materials)?
5. How much is amount reflected in Cost of Sales for Conversion Costs?

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Step 3: (1) Give the final entry to adjust the inventory accounts at the end of the period:

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