650,000 1,650,000 53,000 40,000 33,000 Factory general expenses 40,500 Commission received 30,000 Opening stock of raw materials 45,000 Opening stock of indirect material 25,000 Opening stock of work in progress 23,400 Tutorial class 1. The following are the balances on the books of the Harry Kane as at December 31, 2017: Capital Sales Bank Utilities Insurance Additional notes included the following: a) Closing stock: raw material 48,000; indirect material 30,000; work in progress 27,000; and finished goods 71,500 b) Utilities is owing by 10,000; insurance is prepaid by 3,000; commission is owing by 5,000 c) The wages expensed should be broken down as follows: Directly attributable to the goods produced -25% Indirectly related to the factory Attributed to the office -40% 35% d) The goods produced should be marked up by 10% before being transferred to the sales office e) The provision for bad debts should be revised to 15% of debtors f) Provide for depreciation as follows: Opening stock of finished goods 60,000 Direct expenses 35,500 Purchases of raw material 661,200 Purchases of indirect material 50,000 Premises at cost 800,000 Machinery and equipment at cost 400,000 Motor vehicle g) The following items should be apportioned between the factory and the office Machinery and equipment Fixtures and fittings -10% on the straight line -15% on the reducing balance -10% on the reducing balance Motor vehicle at cost 350,000 Fixtures and fittings 200,000 Provision for depreciation: ITEMS Insurance Machinery and equipment 80,000 Utilities FACTORY OFFICE 80% 20% 60% 40% Motor vehicle 70,000 Depreciation charges: Fixtures and fittings 20,000 Machinery and equipment 70% 30% Return inwards 18,000 Office expense Fixtures and fittings 60% 40% 85,000 Provision for unrealized profits Motor vehicle 50% 50% 4,500 Debtors 32.500 Creditors Required: 17,000 10% Loan 600,000 Loan interest 17,000 Discount allowed 15,000 Wages 240,000 Return outwards on raw material 16,000 Drawings 22,500 a. Prepare the manufacturing account and statement of profit or loss, and statement of financial position for Harry Kane. b. Explain the significance of the realization concept and the historical cost concept when accounting for factory profits. Provision for bad debts 3,100 3,193,600 3,193,600