Part A (25 Marks)

Tugela Manufacturing Company (TMC) manufactures heavy duty machinery according to client specifications. On 1 April 2019 the incomplete work consisted of one job no.305, with accumulated cost to an amount of N$13 000.

The following information in respect of April 2019 is available:

Materials to an amount of N$7 500 were in inventory at the beginning of the month. Additional materials to an amount of N$38 200 were purchased. Only one control account is used for both direct and indirect material.

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Materials were issued as follows:

o Job 305 N$15 800

o Job 306 N$13 400

o Job 307 N$ 9 100

o Indirect material N$ 2 100

Labour costs:

o Job 305 N$16 000

o Job 306 N$12 000

o Job 307 N$ 9 000

o Indirect labour and supervision N$ 5 500

Other manufacturing overheads for April 2019

o Depreciation on machinery and equipment N$6 000

o Water and electricity N$3 000

o Sundry overheads N$1 900

Overheads are allocated to the jobs according to direct labour costs. You may assume that budgeted information is the same as actual.

Jobs 305 and 307 were completed during the month and invoiced to clients at N$65 600 and N$27 200 respectively.

Required:

Mark

3.1

Prepare journal entries to reflect the above transactions in the books of TMC

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3.2

schedule of cost of goods manufactured as well as a profit statement for April 2019 for each job individually and show the incomplete work at the end of the month.

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