Question 1 (60 marks)

Strawberry Belle Manufacturers produce water coolers. They have been operating for three years and their financial year ends annually on 31 August each year.

Additional Information:

Opening Balances (1 September 2008) Direct Material Stock 120 000 Work-In-Progress 110 000 Finished goods stock 85 000

Transactions: Raw material bought on credit 180 000 Raw material bought for cash 60 000 Purchases returned to suppliers 4 700 Purchases returned by customers 2 300 Carriage inwards 9 000 Carriage outwards 19 000 Rent 108 000 Insurance 56 000

Wages and Salaries: Factory foreman 62 400 Factory wages 201 600 Administrative clerks 134 400 Shop assistant 50 400

Telephone: Administration 8 000 Selling and Distribution 14 000 Factory 3 600

Water and Electricity 52 800 Sales 1 870 000

Closing Balances (31 August 2009) Raw material stock 115 000 Work-In-Progress 90 000 Finished goods 102 000

Additional Information 3/5 of the rent is allocated to the factory, the rest is shared equally between the other departments Insurance is paid in a ratio of 4:2:1 for the factory, administration and selling and distribution respectively Water and electricity is divided 50% to factory, 30% to administration and the remainder to selling and distribution

Required:

Question 1:

Show the following accounts in the general ledger: Work-In-Progress (14 marks) Manufacturing Overheads (14 marks) Finished Goods (10 marks)

Question 2:

Calculate the following: Selling and distribution costs (14) Direct materials cost (8)