The following information was extracted from the... | WAEC SSCE - Financial Accounting - 2016

Question 1 Report

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.

Answer

Workings (closing work-in-progress taken as D1,500; rent split factory:selling = 5:3, so factory rent = \(50{,}000 \times 5/8 = 25{,}000\)... note the apportionment gives factory D31,250 and selling D18,750 as shown below).

Factory expenses = \(60{,}000 - 5{,}000 \text{ (prepaid)} = 55{,}000\). Rent to factory = \(50{,}000 \times \tfrac{5}{8} = 31{,}250\); rent to selling = \(50{,}000 \times \tfrac{3}{8} = 18{,}750\). Selling expenses = \(3{,}000 + 2{,}500 \text{ (accrued)} = 5{,}500\).

Daudu Manufacturing Company - Manufacturing, Trading and Profit & Loss Account for the year ended 31 December 2012

Particulars	D	D
Opening stock of raw materials	8,000
Add Purchases of raw materials	40,000
Add Carriage inwards	1,000
	49,000
Less Closing stock of raw materials	(6,000)
Cost of raw materials consumed		43,000
Add Manufacturing wages		100,000
Add Royalties		1,500
Prime cost		144,500
Add Factory overheads:
Factory expenses (60,000 - 5,000)	55,000
Rent (factory 5/8)	31,250
Depreciation of machinery	7,500	93,750
		238,250
Add Opening work-in-progress		2,000
Less Closing work-in-progress		(1,500)
Cost of production (transferred to Trading)		238,750

Trading Account

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 stock of finished goods	(26,000)	(240,750)
Gross profit		149,250

Profit and Loss Account

Gross profit b/d		149,250
Less Expenses:
Rent (selling 3/8)	18,750
Depreciation of delivery van	1,280
Selling expenses (3,000 + 2,500)	5,500
Discount allowed	1,500	(27,030)
Net profit		122,220

Prime cost = D144,500; Cost of production = D238,750; Gross profit = D149,250; Net profit = D122,220.

Read lesson note on Manufacturing Accounts (JAMB)

Read lesson note on Accounts Of Not-for-profit-making Organizations (JAMB)

Read lesson note on Stock Valuation (JAMB)

Answer Details

Daudu Manufacturing Company - Manufacturing, Trading and Profit & Loss Account for the year ended 31 December 2012

Particulars	D	D
Opening stock of raw materials	8,000
Add Purchases of raw materials	40,000
Add Carriage inwards	1,000
	49,000
Less Closing stock of raw materials	(6,000)
Cost of raw materials consumed		43,000
Add Manufacturing wages		100,000
Add Royalties		1,500
Prime cost		144,500
Add Factory overheads:
Factory expenses (60,000 - 5,000)	55,000
Rent (factory 5/8)	31,250
Depreciation of machinery	7,500	93,750
		238,250
Add Opening work-in-progress		2,000
Less Closing work-in-progress		(1,500)
Cost of production (transferred to Trading)		238,750

Trading Account

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 stock of finished goods	(26,000)	(240,750)
Gross profit		149,250

Profit and Loss Account

Gross profit b/d		149,250
Less Expenses:
Rent (selling 3/8)	18,750
Depreciation of delivery van	1,280
Selling expenses (3,000 + 2,500)	5,500
Discount allowed	1,500	(27,030)
Net profit		122,220

Prime cost = D144,500; Cost of production = D238,750; Gross profit = D149,250; Net profit = D122,220.

Read lesson note on Manufacturing Accounts (JAMB)

Read lesson note on Accounts Of Not-for-profit-making Organizations (JAMB)

Read lesson note on Stock Valuation (JAMB)

Manufacturing Accounts

Accounts Of Not-for-profit-making Organizations

Stock Valuation

View Answer

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...

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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...

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