Solution - Manufacturing Problem - GRT Manufacturing

Date PARTICULARS PR Debit Credit

2012
Dec. 2 Purchases 120,000
Freight in 1,200
Accounts Payable 120,000
Cash on hand 1,200
direct materials purchased.

3 Factory supplies 12,300

Accounts Payable 12,000
Cash on hand 300

5 Accounts Payable 1,000

Purchase returns and allowances 1,000
defective materials returned to supplier

15 Accounts receivable 96,000

Sales 96,000
sales on account

20 Accounts Payable 350,000

Cash in bank 350,000
partial payment of account.

23 Rent expense 20,000

Cash in bank 20,000
for the month's rent.

27 Cash on hand 224,000

Sales 224,000
cash sales

29 Direct Labor 45,000

Indirect Labor 9,000
Sales Salaries 11,000
Office Salaries 5,000
Withholding Tax payable 4,300
SSS Contributions Payable 3,400
Pag-ibig contributions payable 900
Philhealth Contributions payable 2,100
Cash on hand 59,300
Payroll paid.
 Date Particulars PR Debit Credit

Dec. 29 Employees' Benefits 8,100

SSS Preiums Payable 5,100
Philhelath Contribution payable 900
Pag-ibig contribution payable 2,100
Employer's share

29 Withholding Taxes 4,300

SSS Contributions Payable 8,500
Pag-ibig contribution payable 1,800
Philhealth Contributions Payable 4,200
Cash on hand 18,800
remittance to agencies

ADJUSTING ENTRIES
Date Particulars PR Debit Credit

Dec. 31 Factory supplies expense 210,000

Factory supplies 210,000
factory supplies used.
 Depreciation Expense - Factory F & E. 132,500
Depreciation Expense - Delivery Equipt. 35,000
Depreciation Expense - Office Equipment 23,500
Accum. Dep. - Factory F & E. 132,500
Accum. Dep. - Delivery Equipment 35,000
Accum. Dep. Office Equipment 23,500
depreciation for the year

Uncollectible Accounts Expense 78,500

Allowance for Uncollectible Accounts
estimated uncollectible accounts 78,500

Interest expense 900

Interest payable 900
accrued interest on notes payable.

Sales salaries 14,300

Light and water expense 6,500
Sales salaries payable 14,300
Light and Water payable 6,500
accrued expenses

Note:
1 Ending were recorded as part of closing entries
2 Allocationg for r ent expense, employees benefits and
light and water - directly extended to worksheet - CGM, IS and SFP.
 GRT Manufacturing
Trial Balance
November 30, 2021

Debit Credit
Cash on hand 70,200
Cash in bank 843,200
Accounts receivable 785,000
Finished goods inventory 1,300,000
Work in Process inventory 442,000
Raw materials inventory 458,000
Factory supplies 235,000
Factory furniture and equipment 1,325,000
Delivery Equipment 350,000
Office furniture and Equipment 235,000
Accounts payable 625,000
Notes payable 500,000
Santos, Capital 3,088,400
Santos, drawing 120,000
Sales 7,209,695
Sales returns and allowance 13,500
Sales discounts 8,500
Purchases 3,640,000
Purchase returns and allowances 23,400
Purchase discounts 8,650
Freight in 10,000
Direct Labor 495,000
Indirect labor 99,000
Sales salaries 396,000
Office salaries 264,000
Rent Expense 220,000
Employees' benefits 48,945
Light and water expense 71,500
Miscellaneous Expense 25,300 __________
11,455,145 11,455,145
 GRT Manufacturing
Unadjusted Trial Balance
December 31, 2021

Debit Credit
Cash on hand 214,600
Cash in bank 473,200
Accounts receivable 881,000
Finished goods inventory 1,300,000
Work in Process inventory 442,000
Raw materials inventory 458,000
Factory supplies 247,300
Factory furniture and equipment 1,325,000
Delivery Equipment 350,000
Office furniture and Equipment 235,000
Accounts payable 406,000
Notes payable 500,000
Santos, Capital 3,088,400
Santos, drawing 120,000
Sales 7,529,695
Sales returns and allowance 13,500
Sales discounts 8,500
Purchases 3,760,000
Purchase returns and allowances 24,400
Purchase discounts 8,650
Freight in 11,200
Direct Labor 540,000
Indirect labor 108,000
Sales salaries 407,000
Office salaries 269,000
Rent Expense 240,000
Employees' benefits 57,045
Light and water expense 71,500
Miscellaneous Expense 25,300 __________
11,557,145 11,557,145
 GENERAL LEDGER

Cash on hand Cash in bank

11/30 Bal. 70200 1) 1200 11/30 Bal. 843,200 20) 350000
3) 300 23) 20,000
27) 224,000 29) 59300
29) 18,800 843,200 370,000
294,200 79,600 12/31 Bal. 473,200
Bal. 12/31 214,600

Accounts Payable
Accounts Receivable 5) 1,000 11/30 Bal. 625,000
11/30 Bal. 785,000 20) 350,000 2) 120,000
15) 96,000 3) 12,000
12/31 Bal. 881000 351,000 757,000
12/31 Bal 406,000

Purchases Factory Supplies

11/30 Bal 3,640,000 11/30 Bal. 235,000
2) 120,000 3) 12,300
12/31/Bal. 3,760,000 12/31/ bal 247,300

Purchases Returns and allowances Freight in

11/30 Bal 23,400 11/30 Bal. 10,000
5) 1,000 2 ) 1,200
12/31 Bal. 24,400 12/31/ bal 11,200

Direct Labor Indirect Labor

11/30 Bal 495,000 11/30 Bal. 99,000
29) 45,000 29) 9,000
12/31 Bal. 540,000 12/31/ bal 108,000

Sales Rent Expense

11/30 Bal 7,209,695 11/30 Bal. 220,000
15) 96,000 23) 20,000
27) 224,000 12/31/ bal 240,000
12/31 Bal. 7,529,695
 Sales Salaries Office Salaries
11/30 Bal 396,000 11/30 Bal. 264,000
29) 11,000 29) 5,000
12/31 Bal. 407,,000 12/31 bal 269,,000

Withholding Taxes Payable SSS Contributions Payable

29) 4,300 29) 4,300 8,500 29) 3,400
29) 5,100
4,300 4,300 8,500 8,500
12/31 Bal. 0 12/31 Bal. 0

Pag-ibig contributions Payable Philhealth contributions Payable

29 ) 1,800 29) 900 29 ) 4,200 29 ) 2,100
29) 900 29 ) 2,100
1,800 1,800 4200 4,200
12/31 Bal. 0 12/31 Bal. 0
Work sheet - GRT Manufacuturing

GRT Manufacturing
WORKSHEET
Year Ended December 31, 2021

Trial Balance Adjustments Adjusted Trial Balance Cost of Goods Mfd Income Statement Statement of FP
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash on hand 214,600 214,600 214,600
Cash in bank 473,200 473,200 473,200
Accounts receivable 881,000 881,000 881,000
Finished goods inventory, Jan. 1, 2021 1,300,000 1,300,000 1,300,000
Work in Process inventory, Jan. 1, 2021 442,000 442,000 442,000
Raw materials inventory,Jan. 1, 2021 458,000 458,000 458,000
Factory supplies 247,300 210,000 37,300 37,300
Factory furniture and equipment 1,325,000 1,325,000 1,325,000
Delivery Equipment 350,000 350,000 350,000
Office furniture and Equipment 235,000 235,000 235,000
Accounts payable 406,000 406,000 406,000
Notes payable 500,000 500,000 500,000
Santos, Capital 3,088,400 3,088,400 3,088,400
Santos, drawing 120,000 120,000 120,000
Sales 7,529,695 7,529,695 7,529,695
Sales returns and allowance 13,500 13,500 13,500
Sales discounts 8,500 8,500 8,500
Purchases 3,760,000 3,760,000 3,760,000
Purchase returns and allowances 24,400 24,400 24,400
Purchase discounts 8,650 8,650 8,650
Freight in 11,200 11,200 11,200
Direct Labor 540,000 540,000 540,000
Indirect labor 108,000 108,000 108,000
Sales salaries 407,000 421,300 421,300
Office salaries 269,000 269,000 269,000
Rent Expense 240,000 240,000
Factory 120,000
Selling & Administrative expenses 120,000
Employees' benefits 57,045 57,045
Factory 22,818
Selling & Administrative expenses 34,227
Light and water expense 71,500 6,500 78,000
Factory 54,600
Selling & Administrative expenses 23,400
Miscellaneous Expense 25,300 __________ 25,300 25,300
11,557,145 11,557,145
Raw materials inventory, Dec. 31, 2021 1,235,000 1,235,000
Work in Process, Dec. 31, 2021 725,000 725,000
Finished goods inventory, Dec. 31, 2021 850,000 850,000
Factory supplies expense 210,000 210,000 210,000
Depreciation Expense - Factory F & E. 132,500 132,500 132,500
Depreciation Expense - Delivery Equipt. 35,000 35,000 35,000
Depreciation Expense - Office Equipment 23,500 23,500 23,500
Accum. Dep. - Factory F & E. 132,500 132,500 132,500
Accum. Dep. - Delivery Equipment 35,000 35,000 35,000
Accum. Dep. Office Equipment 23,500 23,500 23,500
Uncollectible Accounts Expense 78,500 78,500 78,500
Allowance for Uncollectible Accounts 78,500 78,500 78,500
Interest payable 900 900
Interest expense 900 900
Sales salaries payable 14,300 14,300
Light and Water payable ________ 6,500 ________ 6,500 __________ __________ __________ __________ __________ 6,500
486,000 486,000 11,848,345 11,848,345 5,859,118 1,993,050 2,353,127 8,379,695 6,446,100 4,285,600
Cost of goods manufactured __________ 3,866,068 3,866,068 __________
5,859,158 5,859,118 6,219,195 8,379,695
Net Income 2,160,500 __________ __________ 2,160,500
8,379,695 8,379,695 6,466,100 6,446,100
 GRT Manufacturing
Statement of Cost of Goods Manufactured
Year Ended December 31, 2021

Raw materials used:

Raw materials, Jan. 1, 2021 458,000
Add: Net Cost of Purchases:
Purchases 3,760,000
Less: Purchase returns and allowances 24,400
Purchase discounts 8,650 33,050
Net Purchases 3,726,950
Add: Freight in 11,200 3,738,150
Total raw materials availalble for use 4,196,150
Less: raw materials inventory, December 31, 2021 1,235,000
Raw materials used 2,961,150
Direct Labor 540,000
Factory overhead:
Indirect Labor 108,000
Factory supplies used 210,000
Rent expense - factory 120,000
Employees' benefits - factory 228,818
Light and water - factory 54,600
Depreciation expense - Factory furniture & Euipt. 132,500 647,918
Total Manufacturing costs 853,918 4,149,068
Add: Work in process, January 1, 2021 442,000
Total costs of goods placed in process 4,591,068
Less: Work in process, December 31, 2021 725,000
Cost of Goods Manufacured 3,866,068
 GRT B2:G60+B2:F30Manufacturing
Income Statement
Year Ended December 31, 2021

Sales 7,529,695
Less: Sales returns and allowances 13,500
Sales discounts 8,500 22,000
Net Sales 7,507,695
Less: Cost of Goods Sold:
Finished Goods , January 1, 2021 1,300,000
Add: Cost of goods manufacture (SCGM) 3,866,068
Total cost of gooda vailable for sale 5,166,068
Less: Finished goods, December 31, 2021 850,000 4,316,068
Gross income 3,191,627
Less: Selling and administrative expenses:
Sales Salaries 421,300
Office salaries 269,000
Rent Expense 120,000
Employees benefits 34,227
Light and water 23,400
Depreciation - delivery equipment 35,000
Depreciation - office equipment 23,500
Uncollectible accounts expense 78,500
Miscellaneous expenses 25,300 1,030,227
Operating income 2,161,400
Less: Finance Cost:
Interest expense 900
Net Income 2,160,500

GRT Manufacturing
Statement of Changes In Equity
Year Ended December 31, 2021

Santos, Capita, January 1, 2021 3,088,400

Add: Net income 2,160,500
Total 5,248,900
Less: Santos, drawing 120,000
Santos, Capita, December 31, 2021 5,128,900
 GRT Manufacturing
Statement of Financial Position
December 31, 2021

ASSETS
Current Assets
Cash on hand 214,600
Cash in bank 473,200
Accounts receivable 881,000
Less: Allowance for uncollectible accounts 78,500 802,500
Finished goods inventory 850,000
Work in Process inventory 725,000
Raw materials inventory 1,235,000
Factory supplies 37,300
Total current assets 4,337,600

Non current Assets

Factory furniture and equipment 1,325,000
Less: Accumulated depreciation 132,500 1,192,500
Delivery Equipment 350,000
Less: Accumulated depreciation 35,000 315,000
Office furniture and Equipment 235,000
Less: Accumulated depreciation 23,500 211,500
Total non-current assets 1,719,000
Total Assets 6,056,600

LIABILITIES AND OWNER'S EQUITY

Liabilities
Accounts payable 406,000
Notes payable 500,000
Interest Payable 900
Sales Salaries payable 14,300
Light and water payable 6,500
Total liabilities 927,700

Owner's Equity:
Santos, capital, December 31, 2021 5,128,900
Total Liabilities and Owner's Equity 6,056,600
 CLOSING ENTRIES
GENERAL JOURNAL
2021 Debit Credit
Dec. 31 Raw materials inventory, December 31, 2021 1,235,000
Work in process inventory, December 31, 2021 725,000
Purchase returns and allowances 24,400
Purchase discounts 8,650
Manufacturing Summary 1,993,050
to record raw materials inventory end,
work in process, end and close manufacturing
accounts with credit balances

Manufacturing summary 5,859,118

Raw materials inventory, January 1, 2021 458,000
Work in process inventory,January 1, 2021 442,000
Purchases 3,760,000
Freight in 11,200
Direct Labor 540,000
Indirect Labor 108,000
Factory supplies used 210,000
Rent expense - factory 120,000
Employees' benefits - factory 22,818
Light and water - factory 54,600
Depreciation expense - Factory furniture & Euipt. 132,500
To close raw material and work in process
beginning and close manufacturing accounts
with debit balances.

Income Summary 3,866,068

Manufacturing Summary 3,866,068
to close manufacturing summary to income
summary.

Finished goods inventory, December 31, 2021 850,000

Sales 7,529,695
Income Summary 8,379,695
to set up finished goods ending and close
sales account.

Income Summary 2,353,127

Finished Goods innventory, january 1, 2021 1,300,000
Sales returns and allowances 13,500
Sales discounts 8,500
Sales Salaries 421,300
Office salaries 269,000
Rent Expense 120,000
Employees benefits 34,227
Light and water 23,400
Depreciation - delivery equipment 35,000
Depreciation - office equipment 23,500
Uncollectible accounts expense 78,500
Miscellaneous expenses 25,300
Interest expense 900
2,353,127
Income Summary 2,160,500
Santos, Capital 2,160,500
To close income summary to capital

Santos, capital 120,000

Santos, drawing 120,000
To close drawing account to capital
 GRT Manufacturing
Post Closing Trial Balance
December 31, 2021

Debit Credit
Cash on hand 214,600
Cash in bank 473,200
Accounts receivable 881,000
Allowance for uncollectible accounts 78,500
Finished goods inventory 850,000
Work in Process inventory 725,000
Raw materials inventory 1,235,000
Factory supplies 37,300
Factory furniture and equipment 1,325,000
Accumulated depreciation 132,500
Delivery Equipment 350,000
Accumulated depreciation 35,000
Office furniture and Equipment 235,000
Accumulated depreciation 23,500
Accounts payable 406,000
Notes payable 500,000
Interest Payable 900
Sales Salaries payable 14,300
Light and water payable 6,500
Santos, capital, December 31, 2021 ________ 5,128,900
6,326,100 6,326,100