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:
-
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 |