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CoursHeroTranscribedText: Problem 5 Darvin Company contained the following account balances: Cash P100,000 Accounts Receivable 60,000 Finished Goods 35,000 Work in Process 18,000 Materials 50,000 Accounts Payable 10,000 Accrued Payroll 8.000 Common Stock 200,000 Retained Earnings 45,000 During January, 2011, the following transactions were completed a) Materials purchased on account, P 200,000 b) Factory Overhead incurred on account, P 35,000 c) Payroll for the period consist of: Direct Labor - P 140,000; Indirect Labor - P 30,000; Sales Salaries - P25,000; and Administrative Expense - P 15,000. Deductions were as follows: Withholding Taxes P 18,520 SSS Premiums 8,400 PhilHealth Contribution 1,125 Pagibig Fund 6,300 d) P 175,000 was paid for payroll. e) Computation of employer's payroll tax is as follows: Factory Selling Administrative SSS Premiums P8,500 P1,250 P750 PhilHealth 600 375 150 Pag-ibig Fund 5,100 750 450 f) Materials issued: Direct Materials - P 185,000; Indirect - P35,000 Factory Overhead was charged to production at 80% of direct labor cost. Work finished and placed in stock - P 410,000 i) Cost of goods sold - P 385,000. The markup was 40% of cost. j) Cash collected form customers, P 405,000 k) Payments for liabilities amounted to P 220,000, other than payroll. Requirements for Problem 5 1. Journal entries to record the above transactions 2. Cost of Goods Sold Statement 3. Income Statement for January, 2011 4. Balance Sheet as of January 31, 2011

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