Joomla TemplatesBest Web HostingBest Joomla Hosting
Home

Articles

Worked example of full set of final accounts

Trial Balance as at 31 December 20X2


$
$
Plant and machinery (cost: $14,000)
11,200

Office equipment (cost: $5,000)
4,500

Stock of raw materials as at 1.1.20X2
750

Stock of finished goods as at 1.1.20X2
980

Work in progress as at 1.1.20X2
380

Royalties
550

Purchases of raw materials
8,700

Carriage inwards
250

Returns outwards of raw materials

350
Manufacturing wages
18,500

Lighting and heating ($630 + $315)
945

Rent ($4,500 + $2,250)
6,750

Insurance ($420 + $210)
630

Indirect wages
540

General repairs and maintenance
450

Office salaries
3,500

General expenses
655

Advertising and promotion
280

Salesmen's salaries
2,000

Sales commission
750

Discounts allowed
370

Bank interest and charges
180

Sales

55,000
Debtors
7,700

Bank
2,300

Cash
450

Creditors

5,990
Drawings
1,500

Capital

13,470




74,810
74,810

Information:

1. As at 31.12.20X2:
Stock of raw materials: $920
Work in progress: $470
Finished goods: $1,120
2. Apportionment:
Lighting & heating, rent and insurance: Factory 2/3, administration 1/3
3. Depreciation:
Plant and machinery 10% per annum
Office equipment 10% per annum


Manufacturing Account for the year ended 31 December 20X2



$

$
Opening stock of raw materials



750
Add: Purchases of raw materials



8,700
Add: Carriage inwards



250









9,700
Less: Returns outwards of raw materials



350









9,350
Less: Closing stock of raw materials



920









8,430
Add: Direct labour - manufacturing wages



18,500
Add: Direct expenses - royalties



550





Prime cost



27,480





Factory overhead expenses




Factory lighting and heating

630


Factory rent

4,500


Factory insurance

420


Indirect wages

540


General repairs and maintenance

450


Depreciation of plant and machinery

1,400

7,940









35,420
Add: Work in progress as at 1.1.20X2



380









35,800
Less: Work in progress as 31.12.20X2



470





Cost of production of finished goods



35,330







Trading and Profit and Loss Account for the year ended 31 December 20X2



$

$

$
Sales





55,000
Less: Cost of good sold






Opening stock of finished goods



980


Add: Production of finished goods



35,330













36,310


Less: Closing stock of finished goods



1,120

35,190







Gross profit





19,810







Administration expenses






Lighting and heating (1/3)

315




Rent (1/3)

2,250




Insurance (1/3)

210




Office salaries

3,500




General expenses

655

6,930









Selling and distribution expenses






Advertising and promotion

280




Salesmen's salaries

2,000




Sales commission

750




Depreciation of office equipment

500

3,530









Financial charges






Discounts allowed

370




Bank interest and charges

180

550

11,010







Net profit





8,800















Balance Sheet as at 31 December 20X2



$

$
Fixed Assets




Plant and machinery

14,000


Less: Accumulated depreciation

4,200

9,800





Office equipment

5,000


Less: Accumulated depreciation

1,000

4,000





Current Assets




Stock:




Raw materials

920


Finished goods

1,120


Work in progress

470


Debtors

7,700


Bank

2,300


Cash

450









12,960


Current Liabilities




Creditors

5,990

6,970









20,770





Financed by




Capital: Balance as at 1.1.20X2



13,470
Add: Net profit



8,800









22,270
Less: Drawings



1,500









20,770






Last Updated (Wednesday, 20 October 2010 12:48)