TUTORIAL EXERCISE 2

1. Putrajaya Steel produced the following balances from manufacturing as at 31.12.2016

Stock at 01.01.2016

Raw Material

7,450.00

Work In Progress (factory cost)

5,330.00

Finished Goods (Transfer value)

2,110.00

Purchase of Raw Material

128,740.00

Purchase returns

310.00

Direct Expenses

3,280.00

Returns Inwards

1,215.00

Carriage Inwards

1,055.00

Rates

5,250.00

Light heat and Power

3,270.00

Direct Wages

187,240.00

Indirect wages

14,320.00

Telephone

890.00

Factory Repairs

2,215.00

Insurance

1,420.00

Factory salaries

38,000.00

Office Salaries

24,000.00

Sales Salaries

27,435.00

Plant and Machinery (at cost) 160,000.00

Provision for Depreciation of plant and Machinery (at 01.01.2016)

64,000.00

Bad Debts (written off)

325.00

Sales

721,560.00

Furniture and Equipment (at cost)

Factory

42,000.00

Office

48,000.00

Provision for Depreciation of furniture and equipment (at 01.01.2016)

Factory

8,400.00

Office

9,600.00

Additional information:

1. Closing stock as at 31.12.2016

Raw Materials

6,325.00

Working progress (Factory cost)

6,105.00

Finished goods (Transfer value)

15,225.00

2. Prepayments as at 31.12.2016

Rates

450.00

Insurance 220.00

3. Accruals as at 31.12.2016 were as follows:

Direct Wages

1,220.00

Telephone

70.00

Light, heat and power

210.00

4. At 31.12.2016 depreciation is to be provided as follows:

Plant and machinery

20%

Furniture and Equipment

10%

5. Expenses are to be apportioned to the factory as follows:

Rates

4/5

Insurance

3/4

Telephone

2/3

Light, heat and power

3/4

a) Establish the Manufacturing Account for the year ended 31.12.2016 b) Construct an income statement