Accounting Test Question No.Mfg 1 (With Answer) On Manufacturing Account

October 10th, 2008 Comments off
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Below is an accounting test question on the preparation of a Manufacturing and trading account:-

Question:

Jim Brothers, a manufacturing company, produces the following balances from its books at 30 th September Year 7

$

Stocks at 1 October Year 6:

Raw materials

7,450

Work-in-progress(factory cost)

5,330

Finished goods(transfer value)

12,110

Purchases of raw materials

128,740

Purchases returns

310

Direct expenses

3,280

Return inwards

1,215

Carriage inwards

1,055

Rates

5,250

Light, heat and power

3,270

Direct Wages

187,240

Indirect Wages

14,320

Telephone

890

Factory repairs

2,215

Insurances

1,420

Factory salaries

38,000

Office salaries

24,000

Sales salaries

27,435

Plant & machinery ( at cost)

160,000

Provision for depreciation of plant & machinery at 1 October Year 6

64,000

Bad debts (written off)

325

Sales

721,560

Furniture & equipment (at cost)

-Factory

42,000

-Office

48,000

Provision for depreciation of furniture & equipment at 1 October Year 6

-Factory

8,400

-Office

9,600

Additional information:

(1) Closing stocks at 30 September Year 7 are as follows:-

$

Raw materials

6,325

Work-in-progress(factory cost)

6,105

Finished goods(transfer value)

15,225

(2) Prepayments at 30 September Year 7:-

$

Rates

450

Insurance

220

(3) Accruals at 30 September Year 7:-

$

Direct wages

1,220

Telephone

70

Light, heat and power

210

(4) At 30 September Year 7, depreciation is to be provided as follows:

Per year on cost

Plant and machinery

20%

Furniture and equipment

10%

(5) Expenses are to be apportioned to the factory as follows:

$

Rates

4 / 5

Insurances

3 / 4

Telephone

2 / 3

Light, heat and power

3 / 4

(6) It is the policy of the company to transfer goods manufactured to the warehouse at factory cost plus 15%

Required:

Prepare in vertical format, Manufacturing and Trading Accounts Of Jim Brothers for the year ended 30 September Year 7

REFER ANSWER

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