James Limited manufactures bicycle parts but also purchases some parts for resale. The following information is available for year ended 2021

December 31:

Inventory at 2021 January 01

Raw materials $63 000

Work-in-progress 17 000

Finished goods 16 480

Sales of finished goods $922 500

Purchases of finished goods 61 700

Purchases of raw materials 358 100

Carriage of finished goods 2 400

Carriage of raw materials 1 400

Machine operators wages 153 500

Factory supervisors salary 48 100

Administrative and sales wages 62 100

Factory machinery at cost 228 000

Office equipment at cost 180 000

Provision for depreciation of factory machinery 45 600

Provision for depreciation of office equipment 27 000

Rent 76 500

Light and heat 39 800 Additional information: Inventory at 2021 December 31:

Raw materials 62 800

Work-in-progress 15 100

Finished goods 36 500

i. At 2021 December 31, rent of $3 500 was owing and prepaid light and heat amounted to $1 700.

ii. Rent, light and heat are apportioned as follows: factory 60%, administration 40%.

iii. Factory machinery is to be depreciated using the straight-line method at 10%.

iv. Office equipment is to be depreciated by the reducing balance method at 15%.

Requirements

A. Prepare the Manufacturing Account for year ended 2021 December 31.

B. Prepare the Income Statement for year ended 2021 December 31.