QUESTION 7The followingtrial balunce was extracted from the books of Mati Lid, a manufacturing company, as a31 December 2010,Sh. "000"Sh. "000"Inventories as at 1 January 2010:Raw materialsFinished goodsWork in progress21,00038.90013,500180.000145.000Wages: Direct-FactorySale of scrap raw materialsRoyaltiesCarriage inwardsPurchases of raw materialsMachinery (Cost Sh.280,000,000)Computers (Cost Sh 20,000,000)General factory expensesLightingFactory powerSales35.0007,0003,500370,000230,00012,00031,0007,50013.7001.000,000Administrative salariesSales representative salariesCommission on salesReni4,00030,00011.50012.0004,20013,400InsuranceGeneral administrative expensesBank charges2,300Discounts allowed4,800Carriage outwardsAccounts payableOrdinary share capital (Sh. 10 each)10% debentures5,90064,000360,00060.000BuildingsAccounts receivableIII.000142,30076,8001,500Balance at bankCash in handAllowance for doubtful debtsRetained profits (1 January 2010)Debenture interest6.50010.3003.0001,535,800LI35,800 Additional information:-Rent, insurance and lighting expenses are to be apportioned between factory, office anddistribution as follows:Factory%OfficeDistributionRent7030Insurance6080102030Lighting2 Allowance for doubtful debts is to be maintained at 5% and bad debts of Sh. 3,500,000 arc to bewritten-off.Inventories as at 31 December 2010 were valued as follows:Sh.14,000,000Raw materialsI inished goodsWork in progress42,000,00015.500,0004 Accrued rent and general administrative expenses as at 31 December 2010 amounted toSh.1.200,000 and Sh1.500,000 respectively.5. Prepaid insurance as at 31 December 2010 amounted to Sh.360,0006. A provision for corporation tax amounting to Sh.25,340,000 is to be made,7. Depreciation is to be provided as follows:Rate per annum12.5% on reducing balance basis15% on straight line basisAssetMachineryComputersIgnore depreciation on buildings.8. The directors propose to pay a dividend of Sh.0.50 per share.Required;-a) Manufacturing, trading and income statement for the year ended 31 December 2010.Statement of financial position as at 31 December 2010.h)Man 2011 Questin

Manufacturing Account: Information about all the expenses and costs incurred in the preparation of…

Additional informátion: Rent, insurance and lighting expenses are to be apportioned between factory, office and distribution as follows: Factory Office Distribution % Rent 70 30 Insurance 60 10 20 30 Lighting 80 2 Allowance for doubtful debts is to be maintained at 5% and bad debts of Sh. 3,500,000 are to be written-off. Inventories as at 31 December 2010 were valued as follows: Sh. Raw materials I inished goods Work in progress 14,000,000 42,000,000 15,500,000 4. Accrued rent and general administrative expenses as at 31 December 2010 amounted to Sh.1.200,000 and Sh1.500,000 respectively. 5. Prepaid insurance as at 31 December 2010 amounted to Sh.360,000 6. A provision for corporation tax amounting to Sh.25,340,000 is to be made, 7. Depreciation is to be provided as follows: Rate per annum 12.5% on reducing balance basis 15% on straight line basis Asset Machinery Computers Ignore depreciation on buildings. 8. The directors propose to pay a dividend of Sh.0.50 per share. Required;- a) Manufacturing, trading and income statement for the year ended 31 December 2010. of financial position as at 31 December 2010.

Additional informátion: Rent, insurance and lighting expenses are to be apportioned between factory, office and distribution as follows: Factory Office Distribution % Rent 70 30 Insurance 60 10 20 30 Lighting 80 2 Allowance for doubtful debts is to be maintained at 5% and bad debts of Sh. 3,500,000 are to be written-off. Inventories as at 31 December 2010 were valued as follows: Sh. Raw materials I inished goods Work in progress 14,000,000 42,000,000 15,500,000 4. Accrued rent and general administrative expenses as at 31 December 2010 amounted to Sh.1.200,000 and Sh1.500,000 respectively. 5. Prepaid insurance as at 31 December 2010 amounted to Sh.360,000 6. A provision for corporation tax amounting to Sh.25,340,000 is to be made, 7. Depreciation is to be provided as follows: Rate per annum 12.5% on reducing balance basis 15% on straight line basis Asset Machinery Computers Ignore depreciation on buildings. 8. The directors propose to pay a dividend of Sh.0.50 per share. Required;- a) Manufacturing, trading and income statement for the year ended 31 December 2010. of financial position as at 31 December 2010.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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