Self-test From the following extract of information for Delta Manufacturing prepare manufacturing, trading and profit and loss accounts for the year ended 31 December 2009.

You are required to show clearly the prime cost, factory cost of completed production, cost of sales, gross profit, administrative overheads, selling and distribution overheads, and net profit.

Note: In your answer the purchase of finished goods is to be shown in the profit and loss account and sale of scrap material in the manufacturing account.

Stock of raw materials at 1 January 2009 3,920 Work in progress at 1 January 2009 1,840 Stock of finished goods at 1 January 2009 8,215 Purchases of raw materials 64,600 Purchases of finished goods 1,300 Raw materials returned to suppliers 5,020 Carriage outwards 516 Carriage inwards 809 Direct factory wages 28,310 Administrative salaries 11,530 Supervisors’ wages 6,320 Electricity used in factory 3,508 Electricity and heat for administrative offices 1,020 Sales staff salaries 18,897 Bad debts 830 Discount received 3,020 Discount allowed 1,860 Depreciation: plant and machinery 14,250 delivery vehicles 4,160 office fixtures and furniture 2,050 Rent and rates (factory 3

/4, office 1

/4) 9,600 Delivery expenses 725 Postage and telephone 825 Printing and stationery 460 Income from the sale of scrap material 320 Interest payable on loan 4,600 Bank charges 308 Insurance on plant 2,812 Advertising 735 Repairs to plant 1,020 Sales 187,300 Closing stock at 31 December 2009 is:

Raw materials 4,160 Work in progress 2,830 Finished goods 9,210