Part B (MANUFACTURING ACCOUNTS)

Equipco Machines Limited is a manufacturing firm, specializing in construction equipment. The following balances were extracted from the books at October 31, 2021.

Capital	48,000
Provision for unrealized profit	1,380
Stock at November 1, 2020:
Raw materials	7,000
Work-In-Progress	5,000
Finished goods	6,900
Purchases of raw materials	38,000
Direct labour	28,000
Rent & rates	35,000
Electricity	15,000
Postages & stationery	2,000
Administrative staff salary	19,380
Sales	192,000
Plant & Machinery at cost	30,000
Motor vehicles at cost	16,000
Provision for Depreciation:
Plant & Machinery	12,000
Motor vehicles	4,000
Creditors	5,500
Debtors	28,000
Drawings	11,500
Bank	16,600
Advertising	4,500

Additional Information:

1. 55% of rent and rates relates to the office
2. 60% of electricity relates to the factory
3. Stock at 31 October 2021 were as follows:

Raw materials $ 9,000

Work in progress $ 8,000

Finished goods $10,350

4. Factory cost is transferred to trading at a profit of 25%
5. Depreciate plant and machinery at the rate of 10% per annum on the reducing balance method and motor vehicles at 25% per annum on cost
6. Direct labour accrued at December 31,2020 amounted to $3,000 and rent and rates prepaid was $2,000

Required:

1. Prepare a manufacturing, income statement for the year ended October 31, 2021

(30 marks)

2. Prepare a statement of financial position as at October 31, 2021 (20 marks)