12.6 XYZ Ltd is a manufacturing company. It prepares its accounts on half yearly basis. The following information relates to half year ending 31 May 20X7. $ Inventories at 30 November 20X6: Indirect materials 4 000 Finished goods 8 000 Purchases: Raw materials 44 000 Indirect materials 8 000 Finished goods 9 000 Inventories at 31 May 20X7: Indirect materials 3 000 Finished goods 9 000 Increase in raw material inventory 1 000 Decrease in work in process inventory 2 500 Total factory labour cost 65 000 Indirect wages 15 000 License fee paid 9 000 Repairs and insurance (3/4 factory ; 1/4 office) 8 500 Rent and rates (2/3 factory; 1/3 office) 8 000 Miscellaneous factory overheads 1 700 Annual depreciation on machine 3 000 Provision for Unrealised Profit 1 000 Net sales 240 000 Carriage inwards (80% to materials and 20% to finished goods) 1 000 Additional Information: (i) Goods transferred from factory to trading account include a profit of 15%. Provision for unrealised profit is to be made for closing inventory of finished goods. Finished goods purchased during the year have been sold by the year end and are not included in the closing inventory of finished goods. (ii) Accrued rent $1 000 (iii) Unexpired insurance $500 REQUIRED (a) Prepare a Manufacturing Account for the half year ended 31 May 20x7 for XYZ Ltd. (b) Prepare trading section of Income statement for the half year ended 31 May 20X7 for XYZ Ltd. 12.6 XYZ Ltd is a manufacturing company. It prepares its accounts on half yearly basis. The following information relates to half year ending 31 May 20X7. $ Inventories at 30 November 20X6: Indirect materials 4 000 Finished goods 8 000 Purchases: Raw materials 44 000 Indirect materials 8 000 Finished goods 9 000 Inventories at 31 May 20X7: Indirect materials 3 000 Finished goods 9 000 Increase in raw material inventory 1 000 Decrease in work in process inventory 2 500 Total factory labour cost 65 000 Indirect wages 15 000 License fee paid 9 000 Repairs and insurance (3/4 factory ; 1/4 office) 8 500 Rent and rates (2/3 factory; 1/3 office) 8 000 Miscellaneous factory overheads 1 700 Annual depreciation on machine 3 000 Provision for Unrealised Profit 1 000 Net sales 240 000 Carriage inwards (80% to materials and 20% to finished goods) 1 000 Additional Information: (i) Goods transferred from factory to trading account include a profit of 15%. Provision for unrealised profit is to be made for closing inventory of finished goods. Finished goods purchased during the year have been sold by the year end and are not included in the closing inventory of finished goods. (ii) Accrued rent $1 000 (iii) Unexpired insurance $500 REQUIRED (a) Prepare a Manufacturing Account for the half year ended 31 May 20x7 for XYZ Ltd. (b) Prepare trading section of Income statement for the half year ended 31 May 20X7 for XYZ Ltd