Illustration 2 – Manufacturing Accounts
Johnson Ltd is a Manufacturer of Kitchen Furniture. The following information was extracted from the books of the company for the year ended 31st December 1998.
- Light and Power charges accrued on 31st December 1998 amounted to N1,000 and Insurance prepaid on the same date totalled N960.
- Stocks were valued at cost on 31st December 1998 as follows:
- Goods manufactured during the year are to be transferred to the trading account at 114,000.
- Motor vehicle expenses are to be allocated equally to factory expenses and general administrative expenses.
- Office loose tools on hand on 31st December 1998 were valued at N6,000.
- Plant and Machinery and Motor Vehicle are to be depreciated at the rate of 10% and 25% respectively.
You are required to prepare:
(i) Manufacturing, Trading, Profit and Loss Account for the year ended 31st December, 1998.
(ii) Balance sheet as at that date.
1. Light and Power
6,000 + 1,000 =
13,920 – 960 =
3. Motor Expenses Factory
½ x 4,440 = 7,200
4. Loose tools
5. Depreciation: Plant and Machinery
10% x 72,000
6. Motor Vehicle:
25% x 36,000 =
- Explain Prime Cost
- Explain the purpose of Manufacturing Accounts.
- List four (4) Manufacturing account items.
- Prepare from manufacturing account to balance sheet.
- Idayah Limited is a manufacturing company. The following balances were extracted from its records on 31st December, 2014.
Goods manufactured were transferred to sales department at cost plus 10%. You are required to prepare the manufacturing, Trading and Profit and Loss Account for the year ended 31st December, 2014.
(WASSCE JUNE, 2017)