ACB10103 : BUSINESS ACCOUNTING

TUTORIAL : MANUFACTURING ACCOUNTS

QUESTION 1

The trial balance extracted at 30 April 2021 from the books of Unique Creative, a kitchen
manufacturer, is given below:-

Dr Cr
RM RM
Capital account 23,100
Factory machinery at cost 13,080
Accumulated depreciation- Factory machinery 3,250
Office Equipment 1,200
Accumulated depreciation- Office Equipment 440
Account receivable 6,500
Account payable 5,600
Bank 3,330
Drawings 5,000
Bank Loan 9,000
Carriage inwards – Raw materials 780
Carriage outwards 770
Purchase – raw materials 88,800
Light and heat 3,300
Rent and rates 6,260
Direct factory wages 11,520
Office Wages 5,900
Sales commission to selling agents 1,900
Sales 136,300
Stock 1/5/2020 - Raw materials 6,700
Work in Progress 15,050
Finished goods 7,600

_________ _______
177,690 177,690
======== =======
Additional information:

1. At 30 April 2021, accrued office wages amounted to RM300 and direct factory
wages RM480.

2. At 30 April 2021, rent paid included RM820 on 13 February 2021, for the period 1
February to 31 July 2021.

3. Stock at 30 April 2021 were as follows:-

Raw materials RM3,730

5. Depreciation should be allowed for factory machinery on the straight line

6. A provision of RM2,000 should be made for doubtful debts.

Required:

a) Prepare statement cost of goods manufactured , and profit or loss statement for the
year ended 30 April 2021.

b) A statement of financial position for Unique Creative as at 30 April 2021.

TL Manufacturers has provided the following list of balances as at 31 December 2020:

RM
Inventory as at 1/1/2020:
Raw materials 9,000
Work in progress 10,960
Finished goods 13,970
Purchases : Raw materials 38,000
Return outwards (raw materials) 1,200
Return inwards 1,750
Indirect materials 2,000
Direct expense – Hire of special plant 2,350
Carriage inwards (raw materials) 1,100
Carriage outwards 1,250
Salaries : Office 8,900
Advertising 4,400
Light & heat 2,200
Discount received 635
Insurance 5,400
Rent & rates 12,000
Direct wages 22,600
Machinery (at cost) 35,000
Delivery van (at cost) 25,000
Bank 6,400
Receivables 24,500
Payables 21,500
Sales 128,310
Salaries for salesmen 8,500
Capital 83,635

Additional information:

1. Finished goods manufactured during the accounting period are transfered from the
factory at cost of production plus 10% mark-up.

2. Inventory as at 31/12/2020:

RM
Raw materials 12,400
Work in progress 12,500
Finished goods (at cost +10%) 34,760

3. Provide for depreciation of 10% on machinery and 5% on delivery van, on cost.

4. The following expenses was still outstanding at 31/12/2020:

5. Insurance prepaid RM210.

6. Allocation of expenses are as follows:

Factory Office
Light & heat 3/4 1/4
Rent & rates 2/3 1/3
Insurance 2/3 1/3

Required :

Prepare the following accounts:

a) Statement cost of goods manufactured for the year ended 31 December 2021

b) Profit or Loss Statement for the year ended 31 December 2021;

c) Statement of Financial Position as at 31 December 2021.