Farouk started a manufacturing business on 1 April 20–5. He provided the following information:

Additional information:

1. The rent and rates and the general expenses are to be apportioned 2/3 to the factory and 1/3 to the office.
2. The factory machinery is to be deprecated at 25% per annum on cost and the office fixtures and fittings by 10% per annum on cost. No additional non-current assets were purchased during the year.

a. Prepare the manufacturing account for the year ended 31 March 20–6.
b. Prepare the income statement for the year ended 31 March 20–6.

Transcribed Image Text:

On 1 April 20-5: Cost of factory machinery 28000 Cost of factory hand tools 800 Cost of office fixtures and fittings 6500 For the year ended 31 March 20-6: Purchases of raw materials 22800 Purchases of finished goods 12200 Carriage on raw materials 1300 Revenue 100400 Wages and salaries - factory operatives 27 200 office staff 15400 factory supervisors 10400 General expenses 4800 Rent and rates 5 100 At 31 March 20-6: Inventory - raw materials 2520 work in progress 2140 finished goods 5210 Value of factory hand tools 650 %24