The following Trial Balance was prepared from the books of Maxwell Productions Ltd on December 31, 2010 and presented to you the Financial Accountant for analysis: Trial Balance Details/Accounts Dr $ Cr $ Insurance -F 1,200,000 Direct expenses-P 4,000,000 Bills payable- B 150,000 Net sales-T 80,000,000 Office furniture and fittings-B 4,500,000 Accumulated depreciation on furniture & fittings-B 900,000 Return outwards of direct raw materials-P 330,000 Rent F&T 3,000,000 500,000 Bank overdraft- B 550,000 Direct raw materials purchased-P 20,330,000 Indirect factory wages-F 4,000,000 Stock of direct raw materials January 1, 2010-P 6,500,000 Stationery -T 1,100,000 Provision for unrealized profit- B&T 600,000 Capital -B 28,940,000 Bad debts-T 370,000 Provision for bad and doubtful debts-B 400,000 Production workers salaries-P 12,000,000 Cash in hand-B 1,500,000 Accounts payable-B 5,600,000 Electricity -F 2,400,000 Commission -T 4,800,000 1,000,000 Stock of finished goods January 1, 2010-T 6,600,000 Discounts-T 800,000 750,000 Carriage inwards of direct raw materials-P 1,600,000 Administrative salaries-T 8,400,000 Accounts receivable-B 9,000,000 Motor vehicles-B 20,000,000 Provision for depreciation on motor vehicles-B 8,000,000 Work in progress, January 1, 2010-F 3,500,000 Bills receivable-B 420,000 Plant and machinery-B 15,000,000 Accumulated depreciation on plant and machinery-B 6,000,000 Motor vehicles repair cost-F 700,000 Cash drawings -B 2,000,000 133,720,000 133,720,000 See notes on next page. Notes: Depreciation is to be charged as follows: motor vehicles 20% reducing balance; office furniture and fittings 10% straight line; and plant and machinery 10% reducing balance. Insurance amounting to $120,000 was unpaid as at December 31, 2010. Motor vehicle expenses are to be apportioned 3:2 between factory and office respectively. The company adds 10% factory profit to its cost of production. Rent expense is to be apportioned 3:1 between factory and office respectively; 60% of the insurance relates to the factory; and ¾ of the electricity usage relates to the factory. Commission revenue amounting to $150,000 was due to the company as at December 31, 2010. The provision for bad and doubtful debts is to be adjusted to 1½ % of debtors. Indirect factory wages accrued as at December 31, 2010 amounted to $180,000. Stocks as at December 31, 2010 were as follows: Work in progress $4,900,000; Finished goods, $7,700,000 and direct raw materials, $5,000,000. Required: Prepare Manufacturing, Trading and Profit and Loss Account for the year ending December 31, 2010. A Balance Sheet as at December 31, 2010.
The following
Trial Balance
Details/Accounts |
Dr $ |
Cr $ |
Insurance -F |
1,200,000 |
|
Direct expenses-P |
4,000,000 |
|
Bills payable- B |
|
150,000 |
Net sales-T |
|
80,000,000 |
Office furniture and fittings-B |
4,500,000 |
|
|
|
900,000 |
Return outwards of direct raw materials-P |
|
330,000 |
Rent F&T |
3,000,000 |
500,000 |
Bank overdraft- B |
|
550,000 |
Direct raw materials purchased-P |
20,330,000 |
|
Indirect factory wages-F |
4,000,000 |
|
Stock of direct raw materials January 1, 2010-P |
6,500,000 |
|
Stationery -T |
1,100,000 |
|
Provision for unrealized profit- B&T |
|
600,000 |
Capital -B |
|
28,940,000 |
|
370,000 |
|
Provision for bad and doubtful debts-B |
|
400,000 |
Production workers salaries-P |
12,000,000 |
|
Cash in hand-B |
1,500,000 |
|
Accounts payable-B |
|
5,600,000 |
Electricity -F |
2,400,000 |
|
Commission -T |
4,800,000 |
1,000,000 |
Stock of finished goods January 1, 2010-T |
6,600,000 |
|
Discounts-T |
800,000 |
750,000 |
Carriage inwards of direct raw materials-P |
1,600,000 |
|
Administrative salaries-T |
8,400,000 |
|
|
9,000,000 |
|
Motor vehicles-B |
20,000,000 |
|
Provision for depreciation on motor vehicles-B |
|
8,000,000 |
Work in progress, January 1, 2010-F |
3,500,000 |
|
Bills receivable-B |
420,000 |
|
Plant and machinery-B |
15,000,000 |
|
Accumulated depreciation on plant and machinery-B |
|
6,000,000 |
Motor vehicles repair cost-F |
700,000 |
|
Cash drawings -B |
2,000,000 |
|
|
133,720,000 |
133,720,000 |
See notes on next page.
Notes:
- Depreciation is to be charged as follows: motor vehicles 20% reducing balance; office furniture and fittings 10% straight line; and plant and machinery 10% reducing balance.
- Insurance amounting to $120,000 was unpaid as at December 31, 2010.
- Motor vehicle expenses are to be apportioned 3:2 between factory and office respectively.
- The company adds 10% factory profit to its cost of production.
- Rent expense is to be apportioned 3:1 between factory and office respectively; 60% of the insurance relates to the factory; and ¾ of the electricity usage relates to the factory.
- Commission revenue amounting to $150,000 was due to the company as at December 31, 2010.
- The provision for bad and doubtful debts is to be adjusted to 1½ % of debtors.
- Indirect factory wages accrued as at December 31, 2010 amounted to $180,000.
- Stocks as at December 31, 2010 were as follows: Work in progress $4,900,000; Finished goods, $7,700,000 and direct raw materials, $5,000,000.
Required:
- Prepare Manufacturing, Trading and
Profit and Loss Account for the year ending December 31, 2010. - A
Balance Sheet as at December 31, 2010.
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