The following information relates to the business of Nother Limited
Trial Balance at 31 March 2014
|
Dr
|
Cr
|
$000
|
$000
|
Share capital
Factory premises at cost
|
1000
|
1500
|
Factory machinery at cost
Provisions for depreciation: Premises
|
280
|
250
|
Machinery
Inventories at 1 April 2013: Raw materials
|
360
|
140
|
Work in progress
|
210
|
|
Finished goods
Revenue
Purchases of raw materials
|
432
1896
|
5054
|
Manufacturing wages
|
1250
|
|
Factory expenses
|
780
|
|
Administrative expenses
|
80
|
|
Sales expenses
Retained earnings
|
416
|
196
|
Trade receivables and payables
|
840
|
240
|
Provision for doubtful debts
|
|
36
|
Bank overdraft
|
|
144
|
Bad debts written off
|
16
|
|
|
7560
|
7560
|
Additional information
1 Inventories at 31 March 2014 $ Raw materials 300 000
Work in progress 220 000
Finished goods 480 000
2 Other payables at 31 March 2014
$
Factory expenses 112 000
Sales expenses 56 000
Manufacturing wages 40 000
3 Prepayments at 31 March 2014
$
Administrative expenses 8 000
1 During the year ended 31 March 2014 a machine was sold for $14 000. This had been debited to the bank account and credited to the sales account.
The machine had been purchased for $44 000 and depreciation of $24 000 had been written off up to 31 March 2013. A full year’s depreciation is provided in the year of purchase but none in the year of sale.
4 Depreciation is to be provided as follows:
Factory premises 1% straight line
Factory machinery 15% reducing (diminishing) balance.
5 The provision for doubtful debts is to be adjusted to 5% of trade receivables.
REQUIRED :Prepare Nother Limited’s manufacturing account for the year ended 31 March 2014
Nother Limited’s Manufacturing Account for the year ended 31 March 2014
Raw Material
|
$
|
$
360
|
Inventory at 1 April 2013
|
|
1 896
|
Purchases
|
|
2 256
|
Inventory at 31 March 2014
|
|
(300) (1cf)
|
Cost of raw material consumed Manufacturing wages (1250 + 40)
|
|
1 956 (1)
1 290 (1of) label needed
|
Prime cost
Factory expenses (780 (1) + 112 (1))
|
892
|
3 246
|
Provision for depreciation Premises
|
10
|
(1)
|
Machinery
|
18
|
(2) or 21 (1)
|
Loss on sale of machine (44 – 24 –14)
|
6
|
(1cf) 926
|
Work in progress (210 – 220)
|
|
4 172 (1) must be minus
(10)
|
Factory cost of production
|
|
4 162
|
Own figure marks are awarded with no aliens.
Treat revenue as an alien if used in the manufacturing account, lose prime cost mark but all other marks are available – potential maximum 9 marks.
Award marks for raw material cost, manufacturing wages and overheads irrespective of direction.
Work in progress must be the final figure to be rewarded