Question 2

The following Trial Balance was extracted from the books of Raymond Red on

December 31, 2018:

Details/Accounts	Dr $	Cr $
Accounts payable		6,000,000
Finished goods Inventory, January 1, 2018	15,000,000
Motor vehicles	5,500,000
Provision for depreciation motor vehicles		2,500,000
Production workers salary	12,000,000
Furniture, etc.	3,000,000
Cash	10,000,000
Direct expenses	2,600,000
Net sales		98,000,000
Capital		19,100,000
Indirect factory expenses	6,000,000
Work in progress, January 1, 2018	4,000,000
Purchases of direct raw materials	30,000,000
Administrative expenses	8,000,000
Drawings	1,000,000
Provision for doubtful debt		1,000,000
Direct raw materials, January 1, 2018	9,000,000
Accounts receivable	8,500,000
Machinery	18,000,000
Accumulated depreciation machinery	-------------	6,000,000
Total	132,600,000	132,600,000

Additional information:

1. On December 31, 2018 an amount of $150,000 was paid for rent relating to the first

quarter of 2019, while $60,000 was owed for stationery received in December 2018.

rent and stationery are both treated as administrative expense.

2. Closing inventories on December 31, 2018 were: Direct raw materials $6,000,000; work-

in-progress $3,000,000; and finished goods $12,000,000.

3. Depreciation is to be provided for as follows: furniture and fittings 10% straight line;

plant and machinery 10% straight line; motor vehicles 20% reducing balance.

4. The motor vehicles are used equally between the office and the factory.
5. Provision for doubtful debt remains at $1,000,000 as at the balance sheet date.

Required:

1. A Manufacturing, Trading, Profit and Loss Account for the period ending December 31, 2018.

b. List TWO items that would appear under current assets, non-current assets and current liabilities in the balance sheet that was prepared in part (a). Show the amounts for each item.