Manufacturing statement and income statement

  • QUESTION 1 Manufacturing statement and income statement
    Spreadsheet. See the Spreadsheet Advice in Interact2 Resources and the examples in you textbook.
    See the requirements within the spreadsheet template below.
    Hint: The net income is a lucky number.
    Check the spreadsheet assignment requirements. Ensure you have separate data and report areas showing only formulas. Use IF functions to allow for the possibility of either a net income or a net loss.

  • UESTION 2 Understanding the entries in the Materials Control account.
    The Materials Control account balances were $30 000 on 1 June and $25 000 on 30 June. Raw materials purchased during June cost $90 000. Direct materials issued to production during June were $40 000.
    Reconstruct the Materials Control T-account and show the general journal entry to record the cost of raw materials issued as indirect materials during June.
    QUESTION 3 Understanding the entries in the Accrued Payroll account?Salaries and wages payable to factory employees were $10,000 on 1 March and $4,000 on 31 March. Gross salaries and wages paid during March totalled $30,000. March's direct labour totalled $18,000.
    T-account for Accrued Payroll and general journal entries for recording salaries and wages earned by, and paid to, factory employees during March.
    QUESTION 4 Payroll entries
    The Passive Company has a gross payroll of $10,000 per day. Withholdings for PAYG taxes are $3,000 per day. There are no other deductions from employees' earnings. The firm works five days per week, Monday to Friday inclusive. The payroll period covers Thursday to Wednesday inclusive and the payroll for the week is paid on the following Friday.
    Gross payroll consists of $6,000 direct labour, $1,500 indirect factory labour, $1,500 selling expenses and $1,000 general and administrative expenses each day. The following calendar should be used to answer the questions:

  • A. What is the total amount to be credited to Accrued Payroll in respect of July earnings?
    B. If balance day adjustments are performed at the end of each month, what would be the balance in Accrued Payroll account at the close of business on July 31?
    C. Suppose that a single journal entry is made on the last day of each month to record the distribution of total labour costs for the month, but that entries are made each Friday to record payment of wages and withholdings. Also, PAYG taxes withheld are remitted to the Taxation Department at the end of each month.
    1. Show the weekly journal entry.

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    2. Construct the necessary ledger accounts to show all entries in respect of labour costs during the month of July.

  • Ques 5: Activity Based Costing
    Your employer is contemplating changing the existing costing systems used in the business to adopt activity based costing (ABC).
    Prepare a business report to critically evaluate arguments for and against ABC. Use the Internet as a resource (about 300 words excluding references). The following resource will help you prepare and format your report: