Leaving Cert Accounting FINAL ACCOUNTS - Manufacturing: Company Final Accounts including

Question

Company Final Accounts including a Manufacturing Account

Fisher Ltd, a manufacturing firm, has an Authorised Capital of €700,000 divided into 400,000 Ordinary Shares at €1 each and 300,000 4% Preference Shares at € each.

The following Trial Balance was extracted from its books at 31/12/2010:

€
Factory Buildings (cost €550,000)      440,000
Plant and Machinery (cost €240,000)      200,000
Discount (Net)                     2,000
Profit and Loss Balance 1/1/2010            36,440
Stocks finished goods                 80,000
Stocks raw materials                49,500
Work in Progress                      1,100,000

Sales                   1,100,000
Patients                    2,000
Carriage on raw materials              6,600
Hire of special equipment              12,000
Purchase of raw materials             34,000
Dividends paid                    4,000
Sale of scrap material                6,000
Bank                   54,400
Direct factory wages              201,450
Selling expenses (including suspense)             108,000
9% Debentures (including €30,000 issued on 14/2010)       80,000
Issued Share Capital – Ordinary Shares          200,000

General factory overheads             5,400
VAT                     1,800
Debenture interest paid for the first 3 months       2,500
Administration expenses          1,728,700       1,728,700

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

(i) Stocks on hand at 31/12/2010: Finished goods €85,000.

(ii) The figure for finished goods includes items worth €6,600 to produce, but now have a sales value of €4,000.

(iii) Patents were written off over 10 years with the remaining useful life at 5 years.

(iv) The bank balance was still €11,000 on 30/6/2010. The correct interest earned was to be calculated on this balance.

(v) When estimating the correct provision for bad debts, it was established that the correct interest was to be entitled as 5% of debtors.

(vi) The accounts are prepared on an accrual basis.

(vii) Dividends are to be taken out as if they were paid to a customer on a sale or return basis.

(viii) The finance costs must include interest incurred at 5% rate.

You are required to:

(a) Prepare the Manufacturing Account and Profit and Loss Account for the year ended 31/12/2010.

(b) Balance Sheet as at 31/12/2010.

Company Final Accounts including a Manufacturing Account Fisher Ltd, a manufacturing firm, has an Authorised Capital of €700,000 divided into 400,000 Ordinary Shares at €1 each and 300,000 4% Preference Shares at € each - Leaving Cert Accounting - Question 1 - 2011

Manufacturing Account for the year ended 31/12/2010

Balance Sheet as at 31/12/2010

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