Compute the following1. Cost of goods sold2. Work In process Jan 1 2016 Problem 17: Income StatementMARK Inc. is engaged in the business of manufacturing basket balls. Thecompany employs actual costing system. The company uses a single accountfor direct and indirect materials. The company provided the following data forthe year ended December 31, 2016:Gross salesSales returnsGross purchasesPurchase returns, allowance and discountFreight inTotal costs of factory laborDepreciation of factory assetsExpired insurance on factory assetsUtilities expense on factoryTotal administrative expensesTotal marketing expenses9,500,000500,0001,000,000200,000400,0001,000,000300,000100,000500,0002,000,0003,000,000Inventories are as follows:December 31January 1100,000Raw materialsWork in processFinished goods300,000200,000600,000500,000The following additional data are provided:1. The net profit ratio of the company before income tax for the year endedDecember 31, 2016 was 10% of net sales.2. The direct labor cost for the year was four times the cost of indirect labor.3. The cost of indirect materials used was P100,000.

Cost of goods sold involves the cost incurred in the production process of the company.

MARK Inc. is engaged in the business of manufacturing basket balls. The company employs actual costing system. The company uses a single account for direct and indirect materials. The company provided the following data for the year ended December 31, 2016:

MARK Inc. is engaged in the business of manufacturing basket balls. The company employs actual costing system. The company uses a single account for direct and indirect materials. The company provided the following data for the year ended December 31, 2016:

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

Compute the following
1. Cost of goods sold
2. Work In process Jan 1 2016

Problem 17: Income Statement
MARK Inc. is engaged in the business of manufacturing basket balls. The
company employs actual costing system. The company uses a single account
for direct and indirect materials. The company provided the following data for
the year ended December 31, 2016:
Gross sales
Sales returns
Gross purchases
Purchase returns, allowance and discount
Freight in
Total costs of factory labor
Depreciation of factory assets
Expired insurance on factory assets
Utilities expense on factory
Total administrative expenses
Total marketing expenses
9,500,000
500,000
1,000,000
200,000
400,000
1,000,000
300,000
100,000
500,000
2,000,000
3,000,000
Inventories are as follows:
December 31
January 1
100,000
Raw materials
Work in process
Finished goods
300,000
200,000
600,000
500,000
The following additional data are provided:
1. The net profit ratio of the company before income tax for the year ended
December 31, 2016 was 10% of net sales.
2. The direct labor cost for the year was four times the cost of indirect labor.
3. The cost of indirect materials used was P100,000.

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