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The manufacturing account

Example 1

GCH is a manufacturer of components and the following is an extract of
balances from the accounting records of the business entity at 31 December
20X4.
$
Inventory at 1 January 20X4
Raw materials 11,000
Work in progress 16,000
Finished goods 20,090
Inventory at 31 December 20X4
Raw materials 17,000
Work in progress 18,000
Finished goods 18,040
Wages
Direct manufacturing 203,080
Factory supervisors 13,325
Direct factory fuel and power 91,000
Factory heat and light 4,500
Royalty payable 4,000
Factory rent 3,000
Purchase of raw materials 256,000
Returns inwards 420
Administrative expenses 14,500
Selling and distribution costs 25,286
Sales 800,290

Required:

(a) Prepare the manufacturing account of GCH for the year ended 31
December 20X4

(b) Prepare the statement of profit or loss of GCH for the year ended 31
December 20X4.

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