The listing of the ledger accounts (unadjusted) of Smart Manufacturing Systems Pty Ltd at 30 June 2019

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The listing of the ledger accounts (unadjusted) of Smart Manufacturing Systems Pty Ltd at 30 June 2019 is provided. All ledger balances are normal balances.

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Additional information relating to the company is as follows.
1. The inventories as of 30 June 2019 were as follows.

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2. On 1 January 2019, the company paid $81 000 for the next 12 months factory rent. Prepaid rent was debited at the time of the transaction.
3. The Machinery and Equipment account consists of $220 500 of factory machinery and $73 500 of office equipment. All machinery and equipment is depreciated using a 7‐year life.
4. Expenses incurred as of year‐end but not yet recorded are: direct labour, $6000; indirect labour, $1800; administrative expenses, $1050.
5. The electricity and gas, rent and insurance costs are related to factory operations.
6. Allow for company income tax expense at 30% of profit before tax.
Required

(a) Prepare a worksheet including a pair of columns for unadjusted trial balance, adjustments, manufacturing, and the financial statements.

(b) Prepare a cost of goods manufactured statement.

(c) Prepare the closing entries.

(d) Calculate the relationship between factory overhead costs and direct labour costs. Using that relationship, calculate the labour and overhead included in the ending inventories if work in process ending inventory contains $3600 of raw materials, and $6000 of raw materials is included in the finished goods inventory.

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Accounting

ISBN: 9780730363224

10th Edition

Authors: John Hoggett, John Medlin, Keryn Chalmers, Beattie Claire, Hellmann Andreas, Maxfield Jodie

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