QUESTION # 5

From the following information prepare the manufacturing, trading and profit and loss accounts for the year ending 31 December 19X6 and the balance sheet as at 31 December 2012 for the firm of M. Ali.

Rs.

Rs.

Purchase of raw materials

Fuel and light

Administration salaries

Factory wages

Carriage outwards

Rent and rates

Sales

Returns inward

General office expenses

Repairs to plant and machinery

Stock at 1 January 2012

Raw materials

Work in progress

Finished goods

Sundry creditors

Capital account

Freehold premises

Plant and machinery

Debtors

Provision for depreciation on plant and

Machinery at 1 January 2012

Cash in hand

258,000

21,000

17,000

59,000

4,000

21,000

7,000

9,000

9,000

21,000

14,000

23,000

410,000

80,000

20,000

11,000

482,000

37,000

457,000

8,000

984,000

984,000

Make provision for the following:

1.Stock in hand at 31 December 2012

Raw materials25,000

Work in progress11,000

Finished goods26,000

2.Depreciation of 10% on plant and machinery - straight line method

3.80% of fuel and light and 75% of rent and rates to be charged to manufacturing

4.Doubtful debts provision - 5% of sundry debtors

5.4,000 outstanding for fuel and light

6.Rent and rates paid in advance - Rs.5,000

7.Market value of finished goods - Rs.382,000