DETAILS Dr Cr

Purchases of Indirect Material $230,000$

Direct Expenses $30,000$

Factory General Expenses $40,000$

Opening Stock of Indirect Materials $20,000$

Loan Interest Paid $40,000$

Capital $850,000$

Opening stock of Raw Material $70,000$

Carriage In on Raw Material $6,500$

Commission Income $40,000$

Rent Income $75000$

Purchases of Raw Material $640,000$

Opening Stock of WIP $22,000$

Opening Stock of Finished Goods $45,000$

Wages $300,000$

Insurance $50,000$

Utilities $80,000$

Property Plant and Equipment PPE $950,000$

Motor Vehicle $800,000$

Prov for Depn PPE $125,000$

Prov for Depn Motor Vehicle $24,000$

Provision for Unrealized Profit $12,000$

Provision for Bad Debts $8,000$

Debtors $65,000$

Bank $240,000$

Creditors $95,500$

$10\%$ Loan $500,000$

Sales $1,500,000$

Return Inwards $6,000$

Drawings $30,000$

Cash $55,000$

$34695003469500$

The following additional information is also provided:

Closing stock

Raw material $65,000,$ Indirect Material $35,000.$ Work in Progress $21125,$ Finished

Goods $93,500$

Wages owing by $60,000,$ insurance prepaid by $10,000$

Depreciation is to be charges on the non current assets as follows

Property plant and equipment $5\%$ on the reducing balance Motor vehicle $10\%$ on the

straight line basis. All depreciation charges are to be applied equally in the factory and

the office

The provision for bad debts is to be adjusted to $10\%$ of the debtors

The commission income is owing by $10,000$ while the rent income is prepaid by

$15,000$

The goods produced are to be marked up by $10\%$ in the factory before being

transferred as finished goods

The wages is to be applied $50\%$ to the office, $30\%$ indirectly to the factory, and $20\%$

directly in the factory

Apportion the insurance and the utilities cost $60\%$ to the factory and the remainder

to the office

Required

Prepare the Manufacturing Account and Income Statement for the year ending

December $31,2022$; as well as the Statement of Financial Position as at December $31,$

$2022(55$ marks$)$

Explain the classification of closing stock as used in the manufacturing enterprise

$(10$ marks$)$

Given that the goods produced are to be marked up by a percentage rate before being

transferred as finished goods, briefly explain

a$)$ the accounting treatment for the amount calculated based on the mark up $(5$ marks $)$

b$)$ the accounting implications if the finished goods are not all sold off at the end of

the year $(10$ marks $)$