Preparation of Trading, Profit And Loss Account, Manufacturing Account, And Balance Sheet - SS2 Accounting Lesson Note
The trial balance is drawn from the books of Ayo’s concept for the year ended 31 December 2022, given closing stock of raw materials and finished goods as ₦7500 and ₦3950. Closing work in progress is ₦2750. You are required to:
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Prepare manufacturing account
Prepare a trading, profit and loss account
TRIAL BALANCE AS OF DECEMBER 31, 2022
|
DR. ₦ |
CR. ₦
Machinery
14250
Carriage inward
2900
General factory expenses
4500
Royalty
3100
Motor vehicle
6000
Factory power
3400
Office machine
3350
Opening stock (raw materials) 01/01/2022
6700
Stock of finished goods 01/01/2022
4650
Work in progress 01/01/2022
5450
Purchases
12050
Sales
93400
Discount allowed
3800
Debtors
9800
Creditors
5900
Wages (direct)
11300
Cash at bank
4270
Sales salaries
8250
Rent on factory
3000
General administrative expenses
3450
Carriage outwards
6400
Lighting expenses
3125
Cash on hand
5875
Insurance of factory machine
5350
Sales commission
9195
Bank interest
2865
Administration salaries
4950
Drawing
3700
Capital
14150
Long-term loan from Tobi
28230
151680
151680
Answer:
MANUFACTURING ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2022
Opening Stock (Raw Material) |
Add: Purchases
Add: Carriage Inwards
Less: Closing Stock
Add: Direct Wages
Add: Royalty
Prime Cost
Factory Overhead Expenses:
Factory Power
General Factory Expenses
Rent on Factory
Lighting Expenses
Insurance of Factory Machine
Add: Work in Progress
Less: Closing Work in Progress
Cost of Production
Cost of Production b/d
(₦)
6700
12050
2900
21650
7500
3400
4500
3000
3125
5350
(₦)
14,150
11300
3100
28550
19375
47925
5450
53375
2750
50625
50625
Statement of profit and loss
For the year ended 31 December 2022
Sales |
Opening Stock of Finished Goods
Add: Production Cost of Goods Completed
Less: Closing Stock of Finished Goods
Gross Profit
Less: Administrative Expenses
General Administrative Expenses
Bank Interest
Administrative Salaries
Add: Selling/Distribution Expenses:
Discount Allowed
Sales Salaries
Carriage Outwards
Sales Commission
Net Profit
Gross Profit b/d
(₦)
4650
50625
55275
3950
3450
2865
4950
3800
8250
6400
3345
(₦)
93400
51325
42075
11265
21795
33060
9015
42075