EXERCISES Question 1 Tictac Ltd. Manufactured and sold sports shoes. It had also decided to import genuine leather shoes to meet the needs of the local consumers. The following balances were extracted from the books on 31 December 1990: $ Carriage inwards: shoes imported 62,300 Carriage outwards 6,500 Electricity 5,600 Factory expenses 44,000 Manufacturing wages 137,500 Office expenses 19,700 Office furniture and fixtures at cost 121,000 Opening stocks: Finished goods at cost 52,300 Work in progress at cost 23,800 Plant and machinery at cost 308,000 Purchases: shoes imported 352,000 Rates and insurance 8,300 Raw materials consumed 354,900 Returns inwards: Shoes manufactured 13,400 Office salaries 146,800 Sales: Shoes manufactured 925,300 Shoes imported 538,600 Selling expenses 36,200 Additional information: (i) Closing stocks valued at cost: Shoes manufactured Shoes imported 55,400 Work in progress 36,700 (ii) From 1 January 1990 onwards, the manufactured goods are transferred to the trading account at factory cost plus 25% profit loading. (iii) Depreciation is to be provided at 10% on cost for office furniture and fixtures and plant and machinery. (iv) The expenses on electricity, and rates and insurance are chargeable three-fifths to the factory and the balance to the office. (v) On 1 July 1990, the company issued for cash $300,000 10% debentures repayable at the end of June 1995. (vi) On 31 December 1990, accrued office salaries amounted to $13,200 and the prepaid insurance premium was $2,300. REQUIRED: Prepare for Tictac Ltd. The following accounts for the year ended 31 December 1990: (a) A manufacturing account showing the prime cost and the total cost of manufactured shoes transferred to the trading account. (b) A trading and profit and loss account showing separately the gross profit on sales of manufactured shoes and imported shoes