Example 3 The following trial balance has been extracted from the books of AB Limited, a Toy Manufacturer, as on December 31, 2009 DR CR Stock of raw material Jan 1, 2009 2,100 Stock of finished goods Jan 1, 2009 3890 WIP Jan 1, 2009 350 Wages (direct 18,000; factory indirect 14500)| 32,500 Royalties 700 Carriage inwards (on raw materials) 350 Purchases of raw materials 37,000 Productive machinery (cost, 28,000) 23,000 Accounting machinery (cost, 2,000) .200 General factory expenses 3100 Lighting 750 Factory power 1,370 Administrative salaries 4,400 Sales reps* salaries 3,000 Commission on sales 1,150 Rent 1,200 Insurance 420 General administration expenses 1,340 Bank charges 230 Discounts allowed 480 Carriage outwards 590 Sales 100,000 Debtors 6,400 Creditors 14,230 Bank 1,680 Cash 150 Drawing 5000 Capital as at January 1, 2009 35,780 142,180 142,180 Note at December 31, 2009: 1. Stock of raw materials 2,400, stock of finished goods 4,000, work in progress 1,500. 2. Lighting, rent and insurance are to be apportioned: factory 5/6, administration 1/6. 3. Depreciation on productive and accounting machinery at 10% per annum on cost