Chapter 19 Manufacturing accounts

Q1 Spinners & Co.

Manufacturing Account for the year ended 31 December 2003

$ $
Direct materials: Stock at 1.1.03 8 000
Purchases 140 000
148 000
Stock at 31.12.03 10 000 138 000
Direct labour 40 600
Patent fees 16 000
Prime cost 194 600
Indirect wages 28 400
Heating and lighting 4 820
Insurance of plant and machinery 5 600
General expenses 14 300
Depreciation of plant and machinery 7 000 60 120
254 720
Work in progress at: 1.1.03 12 000
31.12.03 9 700 2 300
Factory cost of goods produced 257 020
Factory profit (10%) 25 702
Transferred to Trading Account 282 722

Q2 Uggle Box Manufacturing Co.

Manufacturing, Trading and Profit and Loss Account for the year ended 30 April 2004
$ $ $
Direct materials: Stock at 1 May 2003 42 000
Purchases 390 000
Carriage inwards 26 000
458 000
Stock at 30 April 2004 36 000 422 000
Direct labour 280 000
Royalties 40 000
Prime cost 742 000
Factory expenses 20 000
Depreciation: Premises 6 250
Plant and machinery 11 200
Motor vehicles 7 200 24 650 44 650
786 650
Work in progress: 1 May 2003 50 000
30 April 2004 46 000 4 000
Factory cost of goods 790 650
Add Factory profit (20%) 158 130
Transferred to Trading Account 948 780
 $ $ $
Sales 1 240 000
Less Cost of sales Stock at 1 May 2003 48 000
Transferred from factory 948 780
996 780
Stock at 1 April 2004 62 400 934 380
Gross profit 305 720
Selling expenses 42 000
Administration expenses 62 000
Depreciation: Premises 6 250
Plant and machinery 2 800
Motor vehicles 800 9 850 113 850
Net profit on trading 191 770
Factory profit 158 130
Less Increase in Provision for Unrealised Profit 2 400 155 730
Net profit 347 500

Q3 Yendor

Manufacturing, Trading and Profit and Loss Account for the year ended 31 March 2004
$000 $000
Direct materials: Stock at 1.4.03 450
Purchases 2250
Carriage inwards 162
2862
Stock at 31.3.04 440 2422
Direct wages 900
Prime cost 3322
Indirect materials 45
Indirect wages 90
Factory overheads 245
Depreciation: Premises 30
Plant and machinery 75 105 485
3807
Work in progress: 1.4. 03 375
31.3.04 (562) (187)
Factory cost of goods produced 3620
Factory profit (20%) 724
Transferred to Trading Account 4344

Sales 6075
Less Cost of sales:
Stock of finished goods at 1.4.03 390
Transferred from Manufacturing account 4344
4734
Stock of finished goods at 31.3.04 594 4140
Gross profit 1935
Office salaries 391
Other administration expenses 675
Depreciation: Premises 10
Office equipment 30 40 1106
Net profit on trading 829
Factory profit 724
Less Transfer to Provision for Unrealised
Profit 34 690
Net profit 1519