The following information was extracted from the records of James Bond, a sole trader, who operates a Manufacturing business. His financial year-end is December 31. 

Stocks at 1 January 2020 

1.  Raw Materials $78,000
2. Work in progress 18,000 
3. Finished Goods 74,000 
4. Purchases of raw materials 910,000 
5. Carriage on raw materials 7,000 
6. Direct Labour 440,000 
7. Indirect Factory Wages 67,000 
8. Factory engineering costs 36,000 
9. Factory manager's salary 54,000 
10. Sales 2,420,000 
11. Factory Insurance 48,000 
12. Factory power 89,000 
13. Fixed assets: 
14. Buildings at cost 4,400,000 
15. Machinery at cost 900,000 
16. Office Equipment at cost 210,000 
17. Miscellaneous expense 76,000 
18. Office Salaries 38,000 
19. Selling and distribution expenses 99,000 
20. Stocks at 31 December 2020: 
21. Raw materials 24,000 
22. Work in progress 40,500 
23. Finished goods 126,000 
24. 
    
25. Additional information at 31 December 2020: 
26. 
    
27. a) The miscellaneous expense should be shared: Factory 1/5 and Administration 4/5 
28. b) Indirect factory Wages prepaid amounted to $19,000. 
29. c) Factory insurance outstanding amounted to $9200. 
30. d) Depreciate Machinery at 12% per annum on cost and Office Equipment at 20% per annum on cost. 
31. 
    
32. REQUIRED: 
33. 
    
34. a) Prepare the Manufacturing Account and Income Statement for the year ended 31 December 2015
35. b) Differentiate between direct costs and overhead costs