Otjiwarongo Manufacturer Ltd has the following information related to the reporting period ended 31

December 2019.

N$

Inventory: Raw material - 1 January 2019 90 000

Raw material purchased during the year 780 000

Labour cost 655 000

Rent 150 000

Electricity 75 000

Manufacturing equipment at cost 100 000

Delivery vehicles at cost 50 000

Accumulated provision for depreciation ( 1 January 2019):

Manufacturing equipment 30 000

Delivery vehicles 15 000

Uncompleted goods - 1 January 2019 33 000

Inventory of completed goods - 1 January 2019 315 000

Sundry sales and administrative expenses 170 000

Inventory on 31 December 2019:

Raw material 120 000

Uncompleted goods 31 500

Completed goods 450 000

Purchases (other inventory) 100 000

Additional information:

i. An amount of N$ 20 000 is erroneously debited against the purchases account (other inventory),

instead of raw material. Correct the error.

ii. N$ 600 000 is in respect of direct labour costs, whilst the residue is for indirect manufacturing

labour.

iii. The size of the factory is 250 m. The rent amounts to N$ 400/ m per annum.

iv. 60% of the electricity is in respect of manufacturing.

v. Depreciation is determined as follows:

Manufacturing equipment is written off in 10 equal installments.

Otjiwarongo Manufacturer Ltd bought the manufacturing equipment 1 January 2016

15% per annum on vehicles according to the reducing balance method

You are required to:

1. Prepare the following general ledger accounts for Otjiwarongo Manufacturer Ltd for the year

ended 31 December 2019:

1.1 Raw materials inventory account (6 marks)

1.2 Factory overheads expenses account (7 marks)

1.3 Work in progress account (7 marks)

1.4 Finished goods (4 marks)