1

CHAPTER 5

Multiple Choices Theoretical

1. c 6. a
2. b 7. a
3. a 8. a
4. a 9. d
5. a 10. a

Multiple Choices Computational

1. (a)

Regular pay (46 hours x P45) P2,070

Overtime pay (6 hours x P22.50) 135
Gross earnings P2,205

2. (a)

Regular pay (42 hours x P40) P1,680.00

Overtime pay (2 hours x P20) 40.00
Gross earnings 1,720.00
Deductions:
Withholding tax (3%) P51.60
SSS contributions (2%) 34.40
Phil. Health contributions (1%) 17.20
Pag-ibig contributions (1%) 17.20 120.40
Net pay P1,599.60

3. (b)

Regular pay (50 hours x P180) P9,000.00

Overtime pay (10 hours x P90) 900.00
Charge to work in process P9,900.00

4. (a)

Regular pay, charge to work in process account P9,000.00

5. (b)

Bonus pay [(P100 + P320) x 40 hours x 4 weeks] / 50 = P 1,344

Vacation pay [(P100 + P320) x 40 hours x 2)] / 50 = 672
Total charge to Manufacturing Overhead Control P 2,016

6. (b), P1,344

7. (d), P672
2

8. (d)

Gross earnings P4,560

Less regular pay (80 hours x P48) 3,840
Overtime pay 720
Divided by overtime rate (P48 x 150%) 72
Overtime hours 10

Regular pay (80 + 10) x P46 = P4,320

9. (d)

Benefits P1,092.80
Overtime premium (P4,560 - P4,320) 240.00
Charged to Manufacturing Overhead Control P1,332.80

10. (b)

Bonus (P14,904 / 11.5 mos.) P1,296

Vacation [(P14,904 x ) / 11.5 mos.] 648
Pension (P2,070 / 12) 180
Total monthly liability P2,124

11. (c) , 7 hours x P20 = P140

3

PROBLEMS

Problem 5-1

(1) Factory Payroll 480,000

Withholding tax payable 4,800
SSS contribution payable 19,200
Phil. Health contribution payable 4,800
Pag-ibig contribution payable 7,200
Payroll payable 444,000
To record labor incurrence

(2) Work in process 288,000

Factory overhead control 66,000
Selling expenses 72,000
Administrative expenses 54,000
Factory Payroll 480,000
To record payroll distribution.

Factory overhead control

Selling expenses
Administrative expenses
SSS Contribution payable 28,800
ECC payable 9,600
Phil health contribution payable 4,800
Pag-ibig contribution payable 7,200
To record employers contribution.

Direct Indirect Sales Office

Labor Labor Salaries Salaries Total
(P288,000) (P66,000) (P72,000) (P54,000) (P480,000
)
SSS P17,280 P3,960 4,320 3,240 P28,800
ECC 5,760 1,320 1,440 1,080 9,600
Phil. Health 2,880 660 720 540 4,800
Pag-ibig 4,320 990 1,080 810 7,200
P30,240 P6,930 P7,560 P5,670 P50,400

Problem 5-2

(1) Factory Payroll 18,000

Withholding tax payable 2,400
SSS contribution payable 720
Phil. Health contribution payable 180
Pag-ibig contribution payable 270
Payroll payable 14,430
To record labor incurrence
4

(2-a) Administrative expenses 18,000

Factory Payroll 18,000
To record distribution of payroll.

Problem 5-2 (continued)

(2-b) Administrative expenses 1,890
SSS Contribution payable 1,080
ECC payable 360
Phil. Health contribution payable 180
Pag-ibig contribution payable 270
To record employers share for payroll taxes.

Problem 5-3

(1) Work in process 10,400

Factory Payroll 10,400
To record labor cost for:
Regular pay (48 hours x P200) P 9,600
Overtime pay (8 hours x P100) 800
Total P10,400

(2) Work in process (regular pay) 9,600

Factory overhead control (overtime pay) 800
Factory Payroll 10,400
To record payroll distribution.

Problem 5-4

(a) Factory Payroll 27,600

Payroll payable 27,600
To record labor cost.

(b) Work in process 27,600

Factory Payroll 27,600
To record labor distribution.

(c) Factory overhead control 3,600

Estimated liability for bonus 2,400
Estimated liability for vacation 1,200
To record liability for bonus and vacation pay:
Bonus: P27,600 x 11.5 months = P2,400
Vacation: P27,600 / 2) P13,800 / 11.5 months = P1,200.

Problem 5-5

Factory overhead control 7,104

Estimated liability for bonus 4,736
Estimated liability for vacation 2,368
5

To record vacation and bonus pay for one

Weeks production.

Bonus [(P200 + P1,280) x 40 hours x 4 weeks] / 50 weeks =

P4,736
Vacation [P200 + P1,280) x 40 hours x 2 weeks] / 50 weeks =
2,368

Problem 5-6

(1) Factory Payroll 112,000

Withholding tax payable 9,488
SSS contribution payable 4,920
Phil. Health contribution payable 1,400
Pag-ibig contribution payable 2,240
Payroll payable 93,952
To record labor incurrence

(2) Payroll payable 93,952

Cash 93,952
To record payment of the payroll.

(3) Factory overhead control 6,216

Marketing expenses 2,072
Administrative expenses 2,072
SSS contribution payable 5,600
Phil. Health contribution payable 1,400
Pag-ibig contribution payable 2,240
ECC payable 1,120
To record employers payroll taxes.

(4) Withholding tax payable 43,488

SSS contribution payable 22,280
Phil. Health contribution payable 3,960
Pag-ibig contribution payable 6,912
ECC payable 1,120
Cash in bank 77,760
To record payment of payroll taxes.

Problem 5-7

Employee Regular Earnings Overtime Premium Gross Earnings

J. Sy P1,872.00 P -0- P 1,872.00

F. Lim 1,702.00 185.00 1,887.00
H. Ong 1,453.60 94.80 1,548.40
W. Tao 1,188.00 66.00
1,254.00
 6

Problem 5-8

(1) Nov. 7: Factory Payroll 10,680.00

Withholding tax payable 403.20
Payroll payable 10,276.80
WTP (P2,760 + P10,680) x 3%

Nov. 14: Factory Payroll 11,040.00

Withholding tax payable (3%) 331.20
Payroll payable 10,708.80

Problem 5-8 (continued):

Nov. 21: Factory Payroll 10,800.00

Withholding tax payable (3%) 324.00
Payroll payable 10,476.00

Nov. 28: Factory Payroll 10,560.00

Withholding tax payable (3%) 316.80
SSS contribution payable (45,840 x 3%) 1,375.20
Phil. Health cont. payable (P45,840 x 2%) 916.80
Payroll payable 7,951.20

(2) Work in process 35,880.00

Factory overhead control 7,200.00
Factory Payroll 43,080.00

(3) Factory overhead control 4,523.40

SSS contribution payable (P43,080 x 4.5%) 1,938.60
Phil. Health cont. payable (P43,080 x 2%) 861.60
Estimated liability for vacation pay (P43,080 c 4%) 1,723.20

Problem 5-9

(1)

E a r n i n g s D e d u c t i o n s
Emplo Regula Overti Gross With. Phil. Pag- Net
yee r me Earnin Tax SSS Health Ibig Others Amoun
Earnin Premiu gs t
gs m
Reyes 560.00 - 560.00 84.00 34.72 8.40 8.40 10.00 422.88
Santos 1,196.0 78.00 1,274.0 191.10 78.99 19.11 19.11 10.00 955.69
0 0
Manalo 752.50 26.25 778.75 116.81 48.28 11.68 11.68 10.00 580.30
Cruz 442.90 15.45 458.35 68.75 28.42 6.88 6.88 10.00 337.42
Sanche 382.50 21.25 403.75 60.56 25.03 6.06 6.06 10.00 296.04
z
Webb 920.00 - 920.00 138.00 57.04 13.80 13.80 10.00 687.36
4,253.9 140.95 4,394.8 659.23 272.48 65.92 65.92 60.00 3,271.3
0 5 0
7

(2) Factory Payroll 4,394.85

Withholding tax payable 659.23
SSS contribution payable 272.48
Phil. Health contribution payable 65.92
Pag-ibig contribution payable 65.92
Union dues deduction payable 60.00
Payroll payable 3,271.30
To record payroll for the week ending October 31, 2010.

Problem 5-10

(1) Factory Payroll 658,150

SSS contribution payable 40,805
Phil. Health contribution payable 9,872
Withholding tax payable 98,723
Pag-ibig contribution payable 9,800
Payroll payable or Wages payable 498,950
To record payroll for the week ending April 20, 2010.

(2) Payroll payable 498,950

Vouchers payable 498,950
To record payroll voucher.

(3) Voucher payable 498,950

Cash in bank 498,950
To record payment of the payroll.

Problem 5-11

(1) Factory Payroll 84,380

Withholding tax payable 12,700
SSS contribution payable 5,232
Phil. Health contribution payable 1,266
Pag-ibig contribution payable 1,680
Pension plan contribution payable 4,200
Payroll payable or salaries and wages payable 59,302
To record payroll.

(2) Work in process 62,140

Factory overhead control 19,460
Factory payroll 84,380
8

(3) Factory overhead control 9,958

SSS contribution payable 2,532
Phil. Health contribution payable 1,688
Pag-ibig contribution payable 1,688
ECC payable 4,050
To record employers payroll taxes on factory wages
for the month.

(4) The balance of the Factory Payroll account if any represents the amount
of factory wages earned and charged to production but unpaid at the
end of the month. The balance is shown the balance sheet under the
current liability section.

Problem 5-12

(1) ETG Corporation

Summary of Factory Payroll Taxes
For the month ended March 31, 2010

Department SSS Phil. Pag-ibig ECC With. Tax

Health
Factory P 3,273.60 P 792.00 P 792.50 P528.00 P 825.33
Supply
Factory Adm. 3,302.12 798.90 798.90 532.60 496.51
Cutting 4,487.56 1,085.70 1,085.70 723.80 1,174.24
Assembly 4,954.42 1,198.65 1,198.65 799.10 1,383.75
Finishing 5,246.44 1,269.30 1,269.30 846.20 1,269.77
Total P21,264.14 P5,144.55 P5,144.55 P3,429.70 P5,149.60

(2) Factory payroll 40,132.54

SSS contribution payable 21.264.14
Phil. Health contribution payable 5,144.55
Pag-ibig contribution payable 5,144.55
ECC payable 3,429.70
Withholding tax payable 5,149.60
To record employers payroll taxes.

Problem 5-13

2010
Sept. 15: Factory payroll 32.500
SSS contribution payable 2,015
Phil. Health contribution payable 487
9

Pag-ibig contribution payable 487

Withholding tax payable 4,900
Salaries and wages payable 24,611
To record factory payroll, Sept. 1-15.

Salaries and wages payable 24,611

Vouchers payable 24,611
To record payroll voucher.

Voucher payable 24,611

Cash in bank 24,611
To record payment of payroll.

30: Factory payroll 83.200

SSS contribution payable 2,058
Phil. Health contribution payable 498
Pag-ibig contribution payable 498
Withholding tax payable 5,120
Salaries and wages payable 75,026
To record factory payroll, Sept. 16-30.

Problem 5-13 (continued)

Sept. 30 Salaries and wages payable 75,026

Voucher payable 75,026
To record payroll voucher.

Voucher payable 75,026

Cash in bank 75,026
To record payment of payroll.

Work in process 46,240

Factory overhead control 19,460
Factory payroll 65,700
To record payroll distribution.

Factory overhead control 8,237.00

SSS contribution payable 4,073
Phil. Health contribution payable 985
Pag-ibig contribution payable 1,579
ECC contribution payable 1,600
To record employers payroll taxes on
Factory wages for the month of September.

Problem 5-14
10

JOB COST SHEET

Customer Delta Dept. Store Job 479

Description On file Date Started 9/10/2010
Quantity 200 Date Completed _______

MATERIALS DIRECT LABOR APPLIED FACTY

OVERHEAD
DATE REQ.
NO. AMO DATE REF. HOUR AMO DATE HOUR RATE AMO
UNT S UNT S UNT
9/23 TTA 207 1,034.
00
9/30 TTA 732 3,568.
00
939 4,602.
00

Problem 5-14 (continued)

JOB COST SHEET

Customer Educational Toys Job 480

Description On file Date Started 9/18/2010
Quantity 300 Date Completed _______

MATERIALS DIRECT LABOR APPLIED FACTY

OVERHEAD
DATE REQ.
NO. AMO DATE REF. HOUR AMO DATE HOUR RATE AMO
UNT S UNT S UNT
9/23 TTA 183 858.0
0
9/30 TTA 447 2,182.
00
630 3,040.
00
11

JOB COST SHEET

Customer Peter Pan Toys Store Job 481

Description On file Date Started 9/25/2010
Quantity 350 Date Completed _______

MATERIALS DIRECT LABOR APPLIED FACTY

OVERHEAD
DATE REQ.
NO. AMO DATE REF. HOUR AMO DATE HOUR RATE AMO
UNT S UNT S UNT
9/23 TTA 247 1,237.
00
9/30 TTA 1,006 2,772.
00
1,253 4,009.
00

JOB COST SHEET

Customer Joses Specialty Store Job 482

Description On file Date Started 9/27/2010
Quantity 200 Date Completed _______

MATERIALS DIRECT LABOR APPLIED FACTY

OVERHEAD
DATE REQ.
NO. AMO DATE REF. HOUR AMO DATE HOUR RATE AMO
UNT S UNT S UNT
9/30 TTA 387 1,949.
00

Problem 5-14 (continued)

JOB COST SHEET

 12

Customer Pablo Toys Shop Job 483

Description On file Date Started 9/27/2010
Quantity 150 Date Completed _______

MATERIALS DIRECT LABOR APPLIED FACTY

OVERHEAD
DATE REQ.
NO. AMO DATE REF. HOUR AMO DATE HOUR RATE AMO
UNT S UNT S UNT
9/30 TTA 96 490.0
0

DEPARTMENTAL OVERHEAD ANALYSIS SHEET

Department __________________ Month of September, 2010

INDIR INDIR PAYR REPAI OTHE

DATE REF TOTAL ECT ECT OLL DEPN. RS UTILI R AMOU
. MATE LABO TAXES &MAI TIES ITEM NT
RIALS R NT.
Sept 2 TTA 1,917.00 1,917.
00
9 TTA 2,801.00 2,801.
00
15 TTA 7,320.00 7,320.
00
16 TTA 3,430.00 3,430.
00
23 TTA 3,722.00 3,722.
00
30 TTA 3,163.00 3,163.
00
30 SPT 7,979.27 7,979.
27
30.332.2 22,353 7,979.
7 .00 27
13

Problem 5-14 (continued)

Work in Process No.

122

POST DR.
DATE EXPLANATIO REF. DEBIT CREDIT BALANCE CR.
N
2010
SEPT. 30 J9-33 50,171.00 50,171.00 Dr.

SSS Contribution Payable No.

210

POST DR.
DATE EXPLANATIO REF. DEBIT CREDIT BALANCE CR.
N
2010
SEPT. 30 J9-34 4,961.99 4,961.99 Cr.

Phil. Health Contribution Payable

No. 211

POST DR.
DATE EXPLANATIO REF. DEBIT CREDIT BALANCE CR.
N
2010
SEPT. 30 J9-34 1,200.48 1,200.48 Cr.

Pag-ibig Contribution Payable

14

No. 212

POST DR.
DATE EXPLANATIO REF. DEBIT CREDIT BALANCE CR.
N
2010
SEPT. 30 J9-34 385.45 385.45 Cr.

Problem 5-14 (continued)

Withholding Tax Payable No.

213

POST DR.
DATE EXPLANATIO REF. DEBIT CREDIT BALANCE CR.
N
2010
SEPT. 30 J9-34 1,431.35 1,431.35 Cr.

Factory Payroll No.

500

POST DR.
DATE EXPLANATIO REF. DEBIT CREDIT BALANCE CR.
N
2010
SEPT. 1 Balance 8,930.00 Cr.
2 WP 13,740.00 4,810.00 Dr.
9 WP 16,190.00 21,000.00 Dr.
15 WP 7,320.00 28,320.00 Dr.
16 WP 14,950.00 43,270.00 Dr.
23 WP 15,130.00 58,400.00 Dr.
30 WP 14.124.00 72,524.00 Dr.
30 SP 7,508.00 80,032.00 Dr.
30 J9-33 80,032.00 -0-
15

Manufacturing Overhead Control No.

501

POST DR.
DATE EXPLANATIO REF. DEBIT CREDIT BALANCE CR.
N
2010
SEPT. 30 J9-33 29,861.00 29,861.00 Dr.
30 7,979.27 37,840.27 Dr.

Problem 5-14 (continued)

DOLLS, INC.
Summary of Factory Wages
September 2010

PAYROLL PERIOD DIRECT LABOR INDIRECT LABOR TOTAL

Sept. 1-2 2,893.00 1,917.00 4,810.00
3-9 13,389.00 2,801.00 16,190.00
1-15 - 7,320.00 7,320.00
10-16 11,520.00 3,430.00 14,950.00
17-23 11,408.00 3,722.00 15,130.00
24-30 10,961.00 3,163.00 14,124.00
16-30 - 7,508.00 7,508.00
50,171.00 29,861.00 80,032.00

Summary
Direct Labor 50,171.00
Indirect Labor 29,861.00
Total 80,032.00

GENERAL JOURNAL

ACCT
DATE ACCOUNT NO. RE DEBIT CREDIT
F
16

2010
Seot. 30 Work in process 122 50,171.00
Manufacturing overhead 501 29,861.00
control
Factory payroll 500 80,032.00
To record labor cost
distribution.

30 Manufacturing overhead 501 7,979.27

control
SSS contribution payable 210 4,961.99
Phil. Health cont. 211 1,200.48
payable
Pag-ibig cont. payable 212 385.45
With. Tax payable 213 1,431.35
To record employers payroll
taxes on factory wages for the
month.

Problem 5-14 (continued)

Requirement 12:

JOB HOURS TOTAL COST

479 939 P 4,602.00

480 632 3,109.00
481 806 4,009.00
482 387 1,949.00
483 96 490.00
TOTAL 2,860 P14,158.00

Requirement 13:

Indirect labor P29,861.00

Payroll taxes 7,979.27
Total P37,840.27
17

Requirement 14:

NO. AND ACCOUNT NAME DEBIT BALANCE CREDIT

BALANCE

122 Work in process 50,171.00

210 SSS contribution payable P 4,961.99
211 Phil. Health contribution payable 1,200.48
212 Pag-ibig contribution payable 385.45

213 Withholding tax payable 1,431.35

500 Factory payroll -0- -0-
501 Manufacturing overhead control 37,840.27