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WAEC SSCE - Financial Accounting - 1989 (Objective)

Question 1 Report

Use the following information to answer the given question
MANUFACTURING AND TRADING ACCOUNTS
\(\begin{array}{c|c} & N & & N \\ \hline \text{Opening raw material} & 10,000 & \text{Manufacturing cost} & 114,000 \\ purchases & 60,000 \\ & \overline{70,000} & & \\ \text{Less: Closing raw material} & 8,000 & & \\ & \overline{62,000} & & \\ \text{Direct labour} & 20,000 & & \\ \text{Direct expenses} & 20,000 & & \\ \text{Factory overhead} & 12,000 & & \\ & \overline{114,000} & & \overline{114,000} \\ & & & \text{_______} \\ \text{Stock b/d} & \overline{10,000} & sales & X \\ Purchases & X & \text{Less sales returns} & 5,000 \\ \text{Manufacturing cost} & 114,000 & & \\ & \overline{144,000} & & \\ \text{Stock c/d} & 12,000 & & \\ & \overline{132,000} & & \\ \text{Gross profit 20% on sales } & \text{_______} & & \text{_______}\\ & X & & X \end{array}\)
What is the average stock of finished goods?
Answer Details
To find the average stock of finished goods, we need to take the total value of the closing stock for the period and divide it by the number of periods. From the information given, we know that the opening stock of finished goods was N10,000, and the closing stock of finished goods was N12,000. To calculate the average stock of finished goods, we add the opening and closing stock of finished goods, then divide by 2 (since there are 2 periods). Therefore, average stock of finished goods = (N10,000 + N12,000)/2 = N11,000. Hence, the answer is N11,000.
Read lesson note on Nature And Significance Of Accounting (JAMB)
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