Jean Marsh owns a small business making and selling children's toys. The following trial balance was...

  

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Jean Marsh owns a small business making and selling children's toys. The following trial balance was extracted from her books on 31 December 2020. Capital Drawings Sales Inventory at 1 January 2020 Raw materials Finished goods Purchases of raw materials Carriage inwards Factory wages Office salaries J Marsh: salary and expenses General expenses: Factory Office Lighting Rent Insurance Advertising Bad debts Discount received Carriage outwards Plant and machinery, at cost less depreciation Car, at cost less depreciation Bank Cash in hand Accounts receivable and accounts payable You are given the following additional information: 1. Inventory at 31 December 2020: Raw materials DR S 2,000 3,400 6,100 18,000 800 18,500 16,900 10,400 1,200 750 2,500 3,750 950 1,400 650 375 9,100 4,200 3,600 325 7,700 112,600 CR 5 15,000 90,000 1,600 6,000 112,600 $2,900. Finished goods $8,200. There was no work-in progress. 2. Depreciation for the year is to be charged as follows: Plant and machinery $1,500. Car $500. 3. At 31 December 2020 insurance paid in advance was $150 and office general expenses unpaid were $75. 4. Lighting and rent are to be apportioned: 4/5 factory; 1/5 office. Insurance is to be apportioned: %Factory; % office. 5. Jean is the business' salesperson and her salary and expenses are to be treated as a selling expense. She has sole use of the business' car. Required: For the year ended 31 December 2020 prepare: (a) The manufacturing account showing prime cost and factory cost of production. (b) The trading account section of the Statement of Profit or Loss. (c) The profit or loss account section of the Statement of Profit or Loss, distinguishing between administrative and selling costs. (d) A Statement of Financial Position as at 31 December 2020. Jean Marsh owns a small business making and selling children's toys. The following trial balance was extracted from her books on 31 December 2020. Capital Drawings Sales Inventory at 1 January 2020 Raw materials Finished goods Purchases of raw materials Carriage inwards Factory wages Office salaries J Marsh: salary and expenses General expenses: Factory Office Lighting Rent Insurance Advertising Bad debts Discount received Carriage outwards Plant and machinery, at cost less depreciation Car, at cost less depreciation Bank Cash in hand Accounts receivable and accounts payable You are given the following additional information: 1. Inventory at 31 December 2020: Raw materials DR S 2,000 3,400 6,100 18,000 800 18,500 16,900 10,400 1,200 750 2,500 3,750 950 1,400 650 375 9,100 4,200 3,600 325 7,700 112,600 CR 5 15,000 90,000 1,600 6,000 112,600 $2,900. Finished goods $8,200. There was no work-in progress. 2. Depreciation for the year is to be charged as follows: Plant and machinery $1,500. Car $500. 3. At 31 December 2020 insurance paid in advance was $150 and office general expenses unpaid were $75. 4. Lighting and rent are to be apportioned: 4/5 factory; 1/5 office. Insurance is to be apportioned: %Factory; % office. 5. Jean is the business' salesperson and her salary and expenses are to be treated as a selling expense. She has sole use of the business' car. Required: For the year ended 31 December 2020 prepare: (a) The manufacturing account showing prime cost and factory cost of production. (b) The trading account section of the Statement of Profit or Loss. (c) The profit or loss account section of the Statement of Profit or Loss, distinguishing between administrative and selling costs. (d) A Statement of Financial Position as at 31 December 2020.

Answer rating: 100% (QA)

A MANUFACTURING ACCOUNT Particulars Debit Particulars PRIME COST FACTORY COST OF PRODUCTION Opening Raw material 340000 Cost of goods transferred to trading account factory cost of production 4460000 ... View the full answer