Question

Question 2
Heinrich Bauer Stahl Ltd is a company that manufactures steel products. The following trial
balance was extracted from the records of Heinrich Bauer Stahl on 31 December 2018.
Additional information:
 Heating, lights and power for manufacturing as well as rent are to be apportioned: 4/5
Factory, 1/5 office.
N$ N$
Balances
Inventory at 1 January 2018:
· Raw materials 6,800.00
· Finished goods 12,200.00
· Work in progress -
Transactions
Capital 30,000.00
Drawings 4,000.00
Sales 180,000.00
Purchases of raw materials 36,000.00
Carriage inwards 1,600.00
Factory wages 37,000.00
Office salaries 33,800.00
Heinrich Bauer: salary and expenses 20,800.00
Heating, lights and power for manufacturing 5,000.00
Rent 7,500.00
Factory insurance 1,900.00
Advertising 2,800.00
Bank 7,200.00
Cash 650.00
General expenses:
· Factory 2,400.00
· Office 1,500.00
Bad debts 1,300.00
Discount received 3,200.00
Carriage outwards 750.00
Plant and machinery, at cost less depreciation 18,200.00
Car, at cost less depreciation 8,400.00
Trade receivables and payables 15,400.00 12,000.00
225,200.00 225,200.00
Balances
Inventory at 31 December 2018:
· Raw materials 5,800.00
· Finished goods 16,400.00
· Work in progress -
Page 16 of 18
 Factory insurance is to be apportioned: ¾ Factory , ¼ office
 Heinrich Bauers’ expenses and salary are to be regarded as selling expense and has sole
use of the entity’s vehicle.
 Depreciation for the year should be charged as follows:
o Vehicle N$ 1,000.00
o Plant and Machinery N$ 3,000.00
 Factory insurance paid in advance at 31 December 2017 was N$ 300.00 and office
general expenses unpaid were N$ 150.
You are required to:
Prepare the following accounts in the general ledger of Heinrich Bauer Stahl Ltd:
1. Raw material inventory ( 3 Marks)
2. Factory overhead expenses ( 4 Marks)
3. Finished goods and
4. Prepare a statement of profit or loss and other comprehensive income for the year
ending 31 December 2018. ( 11 Marks)

Answer 1