E 3-4 - Gross profit method (Manufacturing entity) The work-in-process inventory of Havlicek Corp. were completely destroyed by fire on June 1, 2021. You were able to establish physical inventory figures as follows: June 1 P120,000 Jan. 1 P 60,000 200,000 280,000 Raw materials Work-in-process Finished goods 240,000 Sales from Jan. 1 to May 31, were P546,750. Purchases of raw materials were P200,000 and freight on purchases, P30,000. Direct labor during the period was P160,000. It was agreed with insurance adjusters that an average gross profit rate of 35% based on cost be used and that direct labor cost was 160% of factory overhead. Required: Çompute for the work in process inventory destroyed by fire.

E 3-4 - Gross profit method (Manufacturing entity) The work-in-process inventory of Havlicek Corp. were completely destroyed by fire on June 1, 2021. You were able to establish physical inventory figures as follows: June 1 P120,000 Jan. 1 P 60,000 200,000 280,000 Raw materials Work-in-process Finished goods 240,000 Sales from Jan. 1 to May 31, were P546,750. Purchases of raw materials were P200,000 and freight on purchases, P30,000. Direct labor during the period was P160,000. It was agreed with insurance adjusters that an average gross profit rate of 35% based on cost be used and that direct labor cost was 160% of factory overhead. Required: Çompute for the work in process inventory destroyed by fire.

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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What is the work in process inventory - Process 2 T-account?
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