O2 Accounting
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ashar mubeenO2 Accounting
Uploaded by
ashar mubeenQuestion:
On 31 July 2021 the following information was provided by KA Limited, a manufacturer
of garden tools.
$
Inventory 1 August 2020
Raw 5 820
materials--------------------------------------
Work in progress---------------------------------- 1 750
Finished goods------------------------------------ 12 360
Purchases
Raw 34 200
materials--------------------------------------
Finished goods------------------------------------ 3 900
Carriage on purchases
Raw 410
materials--------------------------------------
Finished goods------------------------------------ 80
Direct wages--------------------------------------------- 67 200
Indirect factory wages--------------------------------- 24 000
Factory machinery at cost------------------------------ 47 000
Provision for depreciation of factory machinery-- 11 000
Factory general overheads---------------------------- 16 400
Rates----------------------------------------------------- 5 300
Inventory 31 July 2021
Raw materials------------------------------------- 6 030
Work in progress--------------------------------- 2 780
Finished goods----------------------------------- 10 340
Revenue------------------------------------------------- 223 000
Additional information
1 On 31 July 2021 rates, $500, were prepaid.
Rates are to be apportioned 75% factory, 25% office.
2 On 31 July 2021 factory general overheads, $230, were accrued.
3 Factory machinery is to be depreciated at 20% per annum using the
reducing balance method.
REQUIRED
(a) Prepare the manufacturing account of KA Limited for the year ended 31 July 2021.
1
KA Limited
Manufacturing Account for the year ended 31 July 2021
Details $ $
2
(b) Prepare the income statement of KA Limited for the year ended 31 July 2021.
Income Statement for the year ended 31 July 2021
Details $ $
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