Marco plc manufactures garden chairs. The following information is available for the year ended 31 January 2015.

Additional information: 

• Inventories at 31 January 2015 (in $000): raw materials $42; work in progress $18; finished goods at transfer price $150. 

• Depreciation is to be charged on the machinery at 20 per cent per annum using the straight-line method. 

• Depreciation is to be charged on the office equipment at 10 per cent per annum using the straight-line method. 

• The company transfers goods manufactured to the income statement at cost plus 20 per cent. 

• The following expenses should be divided between the factory (4/5) and the office (1/5): heating and lighting; rent and rates.

Required

Prepare:

a. The manufacturing account for the year ended 31 January 2015. 

b. The income statement for the year ended 31 January 2015. 

c. An extract from the statement of financial position as at 31 January 2015 to show the inventories.

Transcribed Image Text:

$000 Carriage inwards on raw materials 12 Carriage outwards 24 Factory wages 527 Heating and lighting 70 Inventories at 1 February 2014 raw materials 40 work in progress 20 finished goods at transfer price 132 Machinery at cost 440 Office equipment at cost Office salaries 110 190 Factory power 105 Purchase of raw materials 568 Rent and rates 80 Revenue 1920