Determine income statement , Financial Accounting

Mr. Wong currently running a small manufacturing business.  The Trial Balance of the business at 31 March 2011 is as follows:

                                                                                RM                      RM

                                                                                DR                       CR

Administration expenses                                           187,950

Advertising                                                                  15,000

Bank and cash in hand                                                  6,750

Capital as at 1 April 2010                                             63,900

Creditors                                                                   107,500

Debtors                                                                     115,000

Drawings                                                                     75,000

Factory -                                                             Direct wages                 85,000

              Indirect wages                                               20,000

              Power                                                            45,000

Furniture and fittings - office                                      23,000

Heat and light                                                              20,000

Plant and equipment                                                  346,000

Plant hire                                                                                                   5,000

Provision for doubtful debts                                                                      4,000

Provision for depreciation 1 April 2010

              Furniture and fittings                                                                 11,500

              Plant and equipment                                                                173,000

Raw material purchases                                             285,000

Rent and rates                                                             25,000

Sales                                                                                                   1,036,800

Selling and distribution expenses                                83,000

Stocks at cost at 1 April 2010

              Raw materials                                               10,000

              Work-in-progress                                          20,000

              Finished goods                                              30,000            ________

                                                                               1,396,700            1,396,700

The following information is available:

1     Expenditure on heat and light and rent and rates is to be apportioned between the factory and the office in the ratio of 9:1 and 3:2 respectively.

2     Accruals at 31 March 2011 were:

                Factory power  $2,000

            Rent and rates  $5,000

       There was also a prepayment of $1,000 for the car insurance for salesmen.  None of these items had been included in the Trial Balance shown above.

3     Stocks at cost at 31 March 2011 were as follows:

                Raw materials              $19,000

            Work-in-progress         $38,000

            Finished goods             $57,000

Depreciation is to be provided for plant and equipment at 50% per annum using the reducing balance method, furniture and fittings at 10% per annum using the straight line method.

4          The provision for doubtful debts at 31 March Year 2011 is to be 5% of the debtors balance at that date.


Prepare for Wong

(a) The Manufacturing Account for the year ended 31 March 2011                                                   

(b) Income Statement for the year ended 31 March Year 2011.  

Posted Date: 2/27/2013 5:48:58 AM | Location : United States

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