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: January 1 100,000 December 31 300,000 200,000 600,000 Raw materials Work in process Finished goods ? 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.

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: January 1 100,000 December 31 300,000 200,000 600,000 Raw materials Work in process Finished goods ? 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.

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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