The following list of balances as at 31 December 2019 has been extracted from the books of Suraya Sdn Bhd.

RM

• Machinery at cost                                 35,000
• Motor van at cost                                 12,500
• Purchases of loose tools                      2,000 
• Sales                                                        95,000
• Factory wages                                         24,500
• Purchases of raw materials                  24,020
• Electricity and power                             2,250
• Direct factory expenses                        13,000
• Machinery repairs                                    750
• Motor van expenses                                6,500
• Rent and insurance                                  10,250
• Administrative staff salaries                   10,000
• Administrative expenses                         1,500
• Sales and marketing staff salaries         4,250
• Capital as at 1 January 2019                   62,500
• Trade receivables                                     2,500
• Trade payables                                          6,500
• Bank                                                            3,000
• Drawings                                                     4,500

Additional information:

1). It is estimated that the machinery and motor van will be used in the business for 10 years and 4 years respectively. The business also estimated that the residual value of the assets will be nil. It is the policy of the business to depreciate its assets using straight line method.

2). At as 31 December 2019 electricity and power owing amounted to RM450.

3). Factory wages are to be apportioned based on the number of workers as follows:

No. Of workers

• Factory workers      29
• Supervisors              6

4). Included in the purchases of raw materials is a charge for carriage inwards of raw materials. On 31 December 2019, a credit note of RM2,520 was received in relation to carriage inwards overcharge. No adjustments had been made in the books.

Sept 2020 CONFIDENTIAL

5). Insurance paid in the year is amounted to RM5,000. This payment is for one year insurance premium starting from 1 April 2019.

6). 40 % of all expenses related to motor van will be charged to the factory.

7). The allocation of other expenses is as follows:

Electricity and power ,    Rent and insurance

Factory                          Office

2/3                                  1/3

3/4                                    1/4

8). Inventories as at 31 December 2019:

RM

• Raw materials                   2,500
• Work in progress             6,750
• Finished goods                 3,680
• Loose Tools                       1,000

9). On 31 August 2019, Suraya Sdn Bhd took a loan amounting to RM24,000 from Maju Bank. Interest is charged at 8% per annum.

Required:

a). Manufacturing Account for the year ended 31 December 2019.

b). Income Statement for the year ended 31 December 2019.

c). Define work in progress .List the possible valuation of work in progress in the manufacturing account.

Answer rating: 100% (QA)

Suraya Sdn Bhd Manufacturing Account For the year ended 31 December 2019 RM Opening inventory 0 Add ... View the full answer