The following information was extracted from the books of Daudu Manufacturing company for the year ended 31st December 2012.
Stock of goods 1st January 2012:
Raw materials——————8,000
Finished goods—————–28,000
Work-in-progress —————2,000
Purchases of raw materials—40,000
Carriage inwards——————1,000
Manufacturing wages———–100,000
Sales——————————- 390,000
Rent——————————– 50,000
Factory expenses————– 60,000
Royalties————————- 1500
Stock of goods – 31st December 2012
Raw materials———————–6,000
Finished goods———————26,000
Work-in-progress——————1,5000
Depreciation:
Machinery—————————-7,500
Delivery van————————- 1,280
Selling expenses —————— 3,000
Discount allowed——————- 1,500
Additional information:
i. Factory expenses prepaid amounted to D5,000
ii. Selling expenses accrued was D2,500
iii. Rent is apportioned between factory and selling department in the ratio 5:3 respectively.
You are required to prepare Manufacturing, Trading, and Profit and Loss Account for the year ended 31st December 2012.
Explanation
Raw material N N
Opening stock 8,000
Add purchases----------------------40,000
carriage inward--------------------- 1,000 41,000
49,000
Less closing stock---------------- 6,000
cost of raw materials used-------- 43,000
Add manufacturing wages------------ 100,000
Royalties-------------------------- 1,500
Prime cost------------------------- 144,500
Factory overhead:
Dep. of machinery------------------ 7,500
Factory exp.(60,000-5,000)---------55,000
Factory rent(50,000 x 5/8)--------- 31,250 93,750
238,250
Add:opening work in progress------- 2,000
240,250
Less:closing work in progress------ 1,500
Cost of production----------------- 238,750
Sales 390,000
Less cost of goods sold:
Opening stock of finished goods----28,000
Add cost of production------------ 238,750
266,750
Less:closing stck of finished gds 26,000 240,750
Gross profit-------------------------- 149,250
Less expenses:
Rent (50,000 x 3/8)--------------- 18,750
Depreciation of delivery van---- 1,280
Selling exp (3,000 + 2,500)----- 5,500
Discount allowed------------------ 1,500 27,030
Net profit----------------------------- 122,220