Leaving Cert Accounting FINAL ACCOUNTS - Manufacturing: 1. Company/Final Accounts includ

Question

1. Company/Final Accounts including a Manufacturing Account

James Ltd., a manufacturing firm, has an Authorised Capital of €800,000 divided into 550,000 Ordinary Shares at €1 each and 230,000 8% Preference Shares at €1 each.

The following Trial Balance was extracted from its books at 31/12/2004:

€
Factory Buildings (Cost €650,000)          405,000
Plant and Machinery (Cost €260,000)          50,000
Discount Notes                               4,000
Profit and Loss Balance 1/1/2004                  82,320
Stocks and Work in Progress:
  Finished Goods                            85,500
  Raw Materials                           48,200
  Work in Progress                           41,150               934,900
Sales                                             741,100           935,000
General Factory Overheads                      50,300
Patents                                            70,000
Purchase of Raw Materials                  432,280
Sale of Scrap Materials                          5,500
Hire of Special Equipment                       12,000
Debtors and Creditors                         17,000
Interim Dividends (6 months)                 17,000
Direct Factory Wages                          198,220
9% Debentures (including €30,000 issued on 1/4/2004)  120,730
Issued Share Capital – Ordinary Shares          300,000
                      – Preference Shares          200,000
Bank                                             11,450
VAT                                             23,000

The following information and instructions are to be taken into account:

(i) Stocks on hand at 31/12/2004:

Finished Goods               9,200

Raw Materials                     92,000

(ii) The figure for Raw Materials includes items which cost €7,000 to produce, but which have a sales value of €4,500.

(iii) The company’s purchased 6,000 units of Scrap Materials at €1.50 per unit, which was sold for €3.20 each.

(iv) Direct Factory Wages is a cost of goods produced (i.e., finished) and a portion should be charged to ‘work in progress’ and to ‘finished goods’.

(v) The Factory Overheads include €22,000 for depreciation on the factory’s machinery, the company’s own
accounts show that the original cost of the machinery was €100,000 with a useful life of 10 years.

(vi) The profit on sale of scrap materials was €2,600.

(vii) Depreciation on Factory Buildings is based on an estimate that the building’s net market value is €18,000.

(viii) The company’s bank balance is overdrawn.

You are required to prepare:
(a) A Manufacturing Account, Trading and Profit and Loss Account for the year ended 31/12/2004.
(b) A Balance Sheet at 31/12/2004.

1. Company/Final Accounts including a Manufacturing Account James Ltd., a manufacturing firm, has an Authorised Capital of €800,000 divided into 550,000 Ordinary Shares at €1 each and 230,000 8% Preference Shares at €1 each - Leaving Cert Accounting - Question 1 - 2005

Stocks on hand at 31/12/2004:

Calculation of Raw Materials Used:

Factory Wages Allocation:

Calculation of Factory Overheads:

Preparation of Manufacturing Account:

Preparation of Trading and Profit and Loss Account:

Balance Sheet Preparation:

Join the Leaving Cert students using SimpleStudy...