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Assignment questions
Q 1. Jo Towbury is a manufacturer and the following balances appeared in his books for the year ended 31st Dec
2002:Stocks on 1-1-2002:$
Raw materials
2 000
Work in progress
850
Finished goods
1 280
Stocks on 31-12-2002:Raw materials
1 250
Work in progress
750
Finished goods
1 120
Purchase of raw materials
8 700
Fuel and power
990
Direct expenses
200
Factory insurance
300
Depreciation of factory plant
420
Insurance of office machinery
150
Wages factory
3 970
Carriage on raw materials
120
Sales of finished goods
38 000
Return outwards
250
Return inwards
300
Required to prepare:
a. The Manufacturing account for the year ended 31st Dec 2002.
b. The trading & profit & loss account for the year ended 31st Dec 2002.
Q2

The following balances are available from the books of a manufacturer for the year ended
31st Dec 2002:Account balances
$
Stocks on 1-1-2002:- Raw materials
4 914
Work in progress
300
Finished goods
2 592
Purchase of raw materials
42 786
Manufacturing wages
46 800
Direct expenses
3 600
Sales of finished goods
1 20 000
Salaries
6 720
General expenses
5 493
Carriage inwards
696
Discount allowed
1 530
Depreciation on :Plant & machinery
4 800
Factory building
280
Office building
450
Stocks on 31-12-2002:- Raw materials
2 058
Work in progress
600
Finished goods
3 714
General expenses include $ 592 incurred for the factory.
Carriage outstanding on 31-12-2002 was $ 400.
Required to prepare Manufacturing, trading and profit & loss account for the year ended 31st Dec 2002.

Q 3.

On 31st Dec 2003, the following balances appeared in the books of A. Allen, a manufacturer of a specialized
product:Stocks on
1-1-2003
31-12-2003
Raw materials
1000
6000
Work in progress
25000
19000
Finished goods
61000
45000
$
Purchase of raw materials -----------------------1 25 000
Carriage inwards -------------------------------------- 5 000
Sales less returns -------------------------------- 4 31 220
Advertisement ----------------------------------------- 4 000
Insurance of the office building ------------------- 1 000
Bank charges ------------------------------------------ - 250
Salaries ----------------------------------------------- 22 000
Bad debts ---------------------------------------------- 1 700
Power charges -------------------------------------- 35 000
Gas & water ------------------------------------------- 5 000
Carriage outwards ----------------------------------- 2 000
Factory rent ------------------------------------------ 12 000
Factory rates & taxes ----------------------------- 2 200
Insurance of plant ----------------------------------- 6 000
Direct wages ---------------------------------------- 75 000
Depreciation of plant ------------------------------ 40 000
Depreciation of office furniture ------------------- 1 000
Office insurance prepaid ---------------------------- 200
Salaries outstanding (31-12-2003) ------------- 2 000
Power charges outstanding (31-12-2003) ----- 5 000
Rates & taxes prepaid (31-12-2003) ---------- 1 000
Required to prepare at 31st Dec 2003:a. The manufacturing account clearly showing the prime cost and the cost of production
b. The trading and Profit & Loss account showing the gross profit or loss and net profit or loss.

Q 4.

From the following items appeared in the books of a manufacturer, for the year ended 31st March 2003, prepare
the Manufacturing account and the trading & profit and loss account for the same date.
Items
$
Stocks on 1-4-2002:- Raw materials
16 000
Work in progress
1 000
Finished goods
8 640
Purchase of raw materials
1 42 620
Factory wages
1 48 000
Indirect wages
8 000
Rent, rates & taxes (factory)
7 200
Lighting & heating (factory)
600
Electricity
9 400
Repairs to factory buildings
800
Carriage outwards
2 320
Carriage inwards
12 000
Salaries
22 000
General expenses
19 310
Cash discount allowed
5 100

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Sales
Advertisement
Depreciation on fixed assets:Stocks on 31-3-2003:-

Plant
Factory building
Office furniture
Raw materials
Finished goods
Work in progress

4 00 000
2 500
16 000
600
500
6 860
12 000
2 000

*Electricity expenses are to be charged to Factory and Office in the ratio of 3:2.
*Salaries owing on 31-3-2003 was $ 2 400
*Rent, rates and taxes include rent paid in advance $ 200.
*There was an item of cash discount received $ 300 which did not appear in the books of the business.
*During the year, the owner had taken finished goods costing $ 4 000 for his own use.
*This transaction was not recorded in the books of the business.
Q 5.

Prepare Manufacturing, trading and profit & loss account from the following balances extracted form the books
of Berten, a Manufacturer, for the year ended 31st Dec 2003:
$
Stock at 1st Jan 2003:- Raw materials ------------- 17 450
Work in progress------------ 17 500
Finished goods -------------- 20 300
Purchases of raw materials ------------------------------ 73 480
Carriage on raw materials -------------------------------- 1 280
Direct labour cost
----------------------------------- 64 350
Office salaries ----------------------------------------------- 15 400
Rent --------------------------------------------------------- 3 000
Office lighting &n heating
------------------------ 5 300
Depreciation on: - Works Machinery ----------------- 6 000
Office equipment ------------------- 1 900
Sale of finished goods --------------------------------------2 02 000
Factory fuel & power ---------------------------------------- 3 250
Insurance ----------------------------------------------------- 2 500
*Rent and insurance are to be apportioned: Factory 3/5, Office 2/5
*Fuel & power unpaid on 31st Dec 2003 amounted to $ 300.
*The stock figures on 31st Dec 2003 were;Raw materials
18 300
Work in progress 16 700
Finished goods 22 465

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Q 6.

Jo Towbury is a manufacturer and the following balances appeared in her books at 31 st Dec
2003, the end of her business financial year.
$
Stock at 1st January 2003:Raw materials
15 000
Work in progress
2 000
Finished goods
20 500
Wages:
Direct manufacturing
3 00 200
Factory supervisors
40 000
General office
20 200
Warehouse
25 500
Heating & lighting
12 000
Carriage outwards
920
Purchase of raw materials
2 12 000
Administrative expenses
2 500
Sales
9 50 000
Stock at 31st Dec 2003:Raw materials
12 500
Work in progress
3 100
Finished goods
20 000
Notes
Heating & lighting is to be apportioned:Factory

Warehouse
1/3
Office
1/6
Warehouse costs are to be included in the trading account.
Prepare for Jo Towbury, for the year ended 31st Dec 2003:
a. The manufacturing account, clearly showing the prime cost and the cost of production.
b. The trading account, showing the gross profit or gross loss.

Q 7.

Fred Dyer, a manufacturer of furniture, rents premises which consist of a workshop in which the furniture is
made and a shop through which the furniture is sold. For the year ended 31 st Dec 2003, the following
information is available:$
Stocks on 1st Jan 2003:Raw materials
2 450
Work in progress
2 000
Finished goods
6 700
st
Stocks on 31 Dec 2003:Raw materials
1 900
Work in progress
2 460
Finished goods
5 320
During the year ended 31st December 2003:Purchase of raw materials
15 300
Purchase of readymade handles& locks
850
Sales of finished goods
81 900
Rent of premises
1 500
Wages (work shop)
24 000

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Wages (shop)
Electricity
Motor vehicle expenses for delivery of
Finished goods to customers
Depreciation of workshop machinery
Purchase of new workshop machinery

6 200
1 350
1 500
2 500
3 000

Fred Dyer apportions the cost of the rent and the electricity between the workshop and the shop
in the ratio of 2:1. He does not maintain any readymade handles and locks.
Prepare for the year ended 31st Dec 2003:i. A manufacturing account showing clearly the prime cost and the cost of production.
ii. A trading account showing the gross profit or gross loss.
iii. Calculate the % of gross profit on sales.
Q 8. Mann is a manufacturer of mini computer, provides you the following information for the year ended 30th June
2002
Stocks
1-7-2001
30-6-2002
Raw materials
$ 19 000
$ 24 500
Work in progress
$ 40 000
$ 15 000
Finished goods
160 units
?
th
The following details are also available for the year ended 30 June 2002:$
Purchase of raw materials
1 99 000
Carriage inwards
1 4000
Return inwards
1 590
Carriage outwards
4 100
Return outwards
600
Rent and rates
14 000
Lighting and hearting
7600
Direct factory expenses
10 900
Factory labour ($38 000 direct and $ 4000 indirect)
42 000
Factory machinery (cost)
60 000
Office machinery(cost)
96 000
Indirect expenses
3 600
Office staff salary
14 600
License and taxes
3 910
Factory supervisors salary
9 000
Notes:1. Lighting charges unpaid by $ 400 on 30th June 2002.
2. Allocate lighting & heating and rent & rates in the ratio of 3:2 between factory and office.
3. Depreciate all the fixed assets @ 20% p.a. on cost.
4. During the year 620 computers were produced and 480 computers were sold for $ 590 each.
Prepare the manufacturing account for the year ended 30 th June 2002 showing clearly the prime cost and cost
of production.

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Q 9.

James is a manufacturer of a single product. He provides the following information relating to his business for
the years ended 31st December 2003.
Stocks
On 1-1-2003
0n 31-12-2003
Raw materials
$ 13 500
$ 14 800
Work in progress
$ 1 000
$ 730
Finished goods(at factory cost)
85 units
?
For the year ended 31st December 2003
Purchase of raw materials
Carriage inwards
Manufacturing wages
Factory power
Rent and rates
Direct factory expenses
General expenses(factory)
Returns outwards
Plant and machinery at cost

$
97 150
1 200
32 100
5 310
4 000
985
1 835
850
44 800

Additional information
1. Manufacturing wages outstanding $ 300
2. Depreciate plant and machinery at 10% p.a. on cost
3. Rent rates are to apportioned to the factory and to the office in the ration of 3:1
4. The cost of production for the year ended 31st December 2002 was $125per unit
5. During the year 2003, 1120 units were produced and 1095 units were sold for $ 210 each.
Prepare the manufacturing account and trading account for the year ended 31 st December 2003, clearly
showing the cost of raw materials consumed, prime cost and cost of production per unit.