Katima Candy CC is a confectionery that manufactures various sweets and candy from syrup. Syrup

is the raw materials used in the manufacturing and is purchased in kilograms. No wastage of syrup

occurs in the production process thus 1kg of syrup material is required to produce 1kg of finished

goods. At each financial year-end no work in progress is on hand. The cost of finished goods is

calculated based on weight.

The following information is available for 2020 financial year:

N$

Inventory 1 January 2020

- Raw material syrup (150 kg) 7,500

- Finished goods (250 kg) 30,000

Syrup purchases

- 1 March 2020 (950 kg @ N$60 per kg) 57,000

- 1 September 2020 (1,000 kg @ R65 per kg) 65,000

Salaries and wages

- Direct labour 90,000

- Production management 30,000

- Administration and sales personnel 20,000

Colour and flavourings used in production process 7,000

Electricity and water plant (variable) 4,950

Advertising and other marketing costs 15,000

Depreciation

- Plant 15,000

- Office equipment 5,000

Repairs and maintenance plant (50% fixed) 9,000

Additional information

1. On 31 December 2020, 300 kg of raw material and 350 kg of finished goods were on hand.

2. Normal production capacity is 2,000 kg of finished goods per year.

3. Due to an increase in the consumers health awareness, the market share for sweets and

candy has been declining. As a result, management is forced to reduce the future selling price

to N$160 per kg and the selling costs are expected to be N$9 per kg.

4. Inventory is valued on the first-in, first-out basis.

5. Ignore tax implications

Required

Prepare the following general ledger accounts for the year ended 31 December 2020:

a) Raw materials (3.5)

b) Work in process (5)

c) Fixed manufacturing overheads (5)

d) Finished goods (6.5)