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.
REQUIRED
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.