Jean Marsh owns a small business making and selling children's toys. The following trial balance was extracted from her books on 31 December 2017.

You are given the following additional information.
1 Inventory at 31 December 2017

There was no work-in-progress.
2 Depreciation for the year is to be charged as follows:

3 At 31 December 2017 insurance paid in advance was £150 and office general expenses unpaid were £75.
4 Lighting and rent are to be apportioned: 4/5 Factory, 1/5 Office. Insurance is to be apportioned: 3/4 Factory,1/5 Office.
5 Jean is the business's salesperson and her salary and expenses are to be treated as a selling expense. She has sole use of the business's car.

Questions:
For the year ended 31 December 2017 prepare

(a) the manufacturing account showing prime cost and factory cost of production.

(b) the trading account section of the statement of profit or loss.

(c) the profit and loss account section of the statement of profit or loss, distinguishing between administrative and selling costs.

(d) a statement of financial position as at 31 December 2017.

Transcribed Image Text:

Dr Cr Capital Drawings Sales 15,000 2,000 90,000 Inventory at 1 January 2017: Raw materials 3,400 Finished goods 6,100 Purchases of raw materials 18,000 Carriage inwards 800 Factory wages 18,500 Office salaries 16,900 J. Marsh: salary and expenses 10,400 General expenses: Factory Office Lighting Rent 1,200 750 2,500 3,750 Insurance Advertising Bad debts 950 1,400 650 Discount received 1,600 Carriage outwards 375 Plant and machinery, at cost less depreciation 9,100 Car, at cost less depreciation 4,200 Bank Cash in hand 3,600 325 Accounts receivable and accounts payable 7,700 6,000 112,600 112,600