Company presents the following selected general ledger accounts showing balances at October 1, 2017: Cash Finished Goods Work in Process Raw materials Prepaid Insurance Accumulated Depreciation Accounts Payable Balances at October 31, 2017 include: Accrued payroll Finished goods Work in Process Raw Materials P 40,000 592,000 164,000 128,000 4,000 280,000 108,000 P 12,000 608,000 188,000 120,000 A summary of transactions for the month of October follows: a. Cash sales b. Raw materials purchased on account c. Direct materials used d. Direct Labor e. Factory insurance expired f. Depreciation for factory equipment g. Factory utility service on account h. Accounts payable paid i. Factory payroll paid P420,000 168,000 156,000 64,000 1,200 6,800 12,000 196,000 88,000 Required: Indirect materials used. Indirect labor Total factory overhead Cost of goods manufa
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Company presents the following selected general ledger accounts
showing balances at October 1, 2017: Cash
Finished Goods
Work in Process
Raw materials
Prepaid Insurance
Balances at October 31, 2017 include: Accrued payroll
Finished goods
Work in Process
Raw Materials
P 40,000 592,000 164,000 128,000
4,000 280,000 108,000
P 12,000 608,000 188,000 120,000 A summary of transactions for the month of October follows: a. Cash sales
b. Raw materials purchased on account c. Direct materials used
d. Direct Labor
e. Factory insurance expired
f. Depreciation for factory equipment g. Factory utility service on account
h. Accounts payable paid
i. Factory payroll paid
P420,000 168,000 156,000
64,000 1,200 6,800
12,000 196,000 88,000
Required:
Indirect materials used.
Indirect labor
Total
Cost
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
