Question Details

Manufacturing accounts 

Martina Monroe manufactures good luck charms. The trial balance extracted at 31 August 2009 shows the following nominal ledger account balances.

Plant and property at cost 			600 
Factory machinery at cost 			500 
Factory machinery accumulated depreciation 			100 
Selling and distribution expenses 		60 
Raw materials purchases 			200
Direct labour 					260 
Direct expenses 				150 
Factory rates 					10 
Indirect factory labour 				50 
Factory maintenance cost 			30 
Factory heating and lighting 			20 
Machine repairs 				10 
Other factory overhead expenses 		40 
Administration expenses 			120 
Stocks at 1 September 2008: 
Raw materials 					100 
Finished goods 					80 
Work in progress 				90 
Bank 						10 
Debtors 					60 
Creditors 							50 
Sales of finished goods 						1,700 
Capital account 							350 
Drawings 					10 
Bank loan 							200 
2,400 		2,400



Additional information: 

Stocks at 31 August 2009: 
Raw materials £ 70,000 
Finished goods £ 100,000 
Work in progress £ 20,000 

Direct labour accrual as at 31 August 2009 £ 20,000 

Selling and distribution expenses accrual as at 31 August 2009 £ 10,000 

No depreciation on plant and property. 

Depreciation on factory machinery on the reducing balance at 20% per annum. 

25% of the administration expenses are attributable to the factory. 

Required:
(a)	Prepare a manufacturing account for the year ending 31 August 2009. 
(b) Prepare a profit and loss account for the year ending 31 August 2009.   
(c) Prepare a balance sheet as at 31 August 2009.  


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