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The manufacturing account

1.4 Statement of profit or loss

The statement of profit or loss will be almost identical. The one exception is that
instead of the cost of finished goods purchased in the year, the trading account will
show the cost of finished goods manufactured in the year.

Establishing the cost of finished goods manufactured in the year is not such a simple
process as finding the total of finished goods purchased by a retailer. It requires a
new account called the manufacturing account to arrive at this cost.

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