QUESTION 2

The following balances have been extracted from the books of BTJ Company Ltd as at 31st December, 2019

GH

Inventories (1st January, 2019):

Raw materials

26,000

Work-in-progress

31,600

Finished goods

73,720

Direct wages

572,000

Indirect wages

218,400

Royalties

5,160

Electricity and power

52,000

General factory expenses

108,000

Maintenance of equipment

70,160

General office expenses

115,800

Purchases of raw materials

496,000

Sales

2,260,000

Depreciation of plant and machinery

36,000

Provision for unrealized profit

16,000

Additional information

i) Inventories in hand at 31st December, 2019:

Raw materials GH19,920

Work in progress GH27,800

Finished goods GH86,000

ii) Electricity and power and Maintenance expenses are to be apportioned 80% to the factory and 20% to the company's offices.

iii) At 31st December, 2019 an electricity bill of GH3,200 remained unpaid and maintenance costs paid in advance amounted to GH3,040

iv) The company always transfers finished goods from the factory to the warehouse at factory cost plus 25%.

You are required to prepare the:

a. Manufacturing account for the year ending 31st December, 2019.

b. Statement of profit or loss for the year ending 31st December, 2019.