Wang Yee is a manufacturer. The following balances were extracted from his books on 31 January 2010. $ Inventories (stocks) 1 February 2009

Raw materials	14 700
Work in progress	23 570
Finished goods	35 000
Purchases of raw materials	75 600
Purchases of finished goods	15 500
Direct factory wages	62 140
Rent	28 000
Factory management salaries	31 500
Office salaries	41 600
Revenue (sales)	342 500
Revenue (sales returns)	1 250
Distribution costs	28 650
Sundry office expenses	9 870
Non-current liability (8% loan repayable 31 December 2015)	40 000
Finance costs (loan interest) paid	2 400
Property (land and buildings) (cost)	80 000
Plant and machinery (cost)	90 000
Office equipment (cost)	30 000
Provision for depreciation of plant and machinery	32 000
Provision for depreciation of office equipment	12 000
Provision for doubtful debts	1 550
Trade receivables (debtors)	45 000
Trade payables (creditors) Cash (bank) Equity	60 700 33 030 Cr 110 000
Drawings	17 000

Additional information: 1 Inventories (stocks) at 31 January 2010 were valued as follows:

Raw materials 16 250

Work in progress 18 780

Finished goods 32 500

2 At 31 January 2010

Direct factory wages, $1 120, were accrued.

Sundry office expenses, $630, were prepaid.

3 Rent is to be apportioned on the basis of area occupied. Three fifths of the area is occupied by

the factory and two fifths by the offices.

4 Depreciation is charged on plant and machinery at 20% per annum using the diminishing

(reducing) balance method.

5 Office equipment is depreciated using the straight-line method at 20% on cost. Office equipment, $24 000, was purchased on 31 July 2006.

Additional office equipment, $6 000, was purchased on 30 September 2009.

No other changes in non-current (fixed) assets occurred in the year ended 31 January 2010.

Depreciation is calculated for the time assets are held in the business.

6 The provision for doubtful debts is to be maintained at 4% of trade receivables (debtors).

REQUIRED

(a) Prepare the manufacturing account of Wang Yee for the year ended 31 January 2010. Show

clearly the cost of raw materials consumed, prime cost and cost of production.

(b) Prepare the income statement (trading and profit and loss accounts) of Wang Yee for the year

ended 31 January 2010.

(c) Prepare the Statement of financial position of Wang Yee at 31 January 2010.