FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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.

 

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