The following are the balances of Zid plc for the year ended 31 December 2011 RM

Question

The following are the balances of Zid plc for the year ended 31 December 2011 RM Stock at 1 January 2011 Raw materials Work in Progress Finished goods 28,800 13,450 7,110 es Purchases: Raw materials 75,800 1,700 54,610 17,000 8,000 3.120 ahour Carriage on raw materials Direct Labour Office salaries Rent Office lighting & heating Depreciation Wocks machinery VC 5,400 otfice equpment 213,340 4,610 Sales Factory Fuel and power Rent is to be apportioned Factory 2/3; Office 1/3 Stocks at 31 December 2011 mesre: Raw materials Work in Progress Finished goods 17,540 14,130 19,000 Required Prepare a manufacturing, trading and profit and loss account for the year ended 31 December 2011.

Explanation / Answer

Manufacturing Account

Note: Manufacturing Overheads = 4000 (2/3 Rent) + 5400 (Depreciation on works equipment) + 4610 (Factory fuel and power) = 14010

The balance b/f from manufacturing account will be transferred to Manufacturing Trading profit and loss account.

  Manufacturing Trading profit and loss account

Other Expenses = 1600 (Depreciation) + 17000 (Salaries) + 2000 (1/3 rent) + 3120 (Office lighting and heating) = 23720

Particulars Debit Particulars Credit Beginning Raw materials 28600 Closing Raw Materials 17540 Beginning WIP 13450 Closing WIP 14130 Purchases: Raw Materials 75600 Direct Labor 54610 By Balance c/f 156300 Direct Expenses 1700 Manufacturing Overheads 14010 TOTAL 187970 TOTAL 187970 To Balance b/f 156300

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