ASSIGNMENT THREE

The following balances have been extracted from the books of Limuru Manufacturers, a small scale manufacturing enterprise, as at 31 December 2002:

		Sh.000
Stocks as at 1 January 2002: Purchases of raw materials Direct labour Factory overheads: Administrative expenses: Sales Plant and machinery: Motor vehicles (for sales deliveries): Creditors Debtors Drawings Balance at bank Capital at 1 January 2002 Provision for unrealized profit at 1 January 2002 Motor vehicles running costs	Raw materials Work in progress Finished goods Variable Fixed Rent and rates Lighting Stationery and postage Staff salaries At cost Provision for depreciation At cost Provision for depreciation	7,000 5,000 6,900 38,000 28,000 16,000 9,000 19,000 6,000 2,000 19,380 192,000 30,000 12,000 16,000 4,000 5,500 28,000 11,500 16,600 48,000 1,380 4,500

Additional information:

1. Stocks at 31 December 2002 were as follows:

Sh.000

Raw materials 9,000

Work in progress 8,000

Finished goods 10,350

2. The factory output is transferred to the trading account at factory cost plus 25% of factory profit.

3. Depreciation is provided at the rates shown below on the original cost of fixed assets held at the end of each financial year:

Plant and machinery - 10% per annum

Motor vehicles - 25% per annum

4. Amounts accrued at 31 December 2002 for direct labour amounted to Sh.3,000,000 and rent and rates prepaid at 31 December 2002 amounted to Sh.2,000,000.

Required:

1. Manufacturing, trading and profit and loss accounts for the year ended 31 December 2002.

(12 marks)