In: Accounting
TG Sdn. Bhd. is an electrical manufacturing company located in Pagoh. It is a wellestablished company with a favorable reputation for the quality of their products. The company manages to increase its production to meet their customer’s demand. Among the company’s goals is to have a better management in controlling product costs. Presented below is the information for the year ended 31 December 2019: RM Sales 6,300,000 Sales Expenses 210,000 Administration Expenses 135,000 Income Tax Expenses 75,000 Direct Material Purchased 1,650,000 Direct Labour 840,000 Indirect Labour 360,000 Depreciation Expenses – Factory Machine 45,000 Utilities Expenses 135,000 Depreciation Expenses – Factory Building 90,000 Insurance Expenses 60,000 Supplies Expenses 75,000 Other Expenses 90,000 Finished Goods Inventory, 31 December 2019 390,000 Work-in-process Inventory, 31 December 2019 162,000 Direct Material Inventory, 31 December 2019 105,000 Additional information: 1. The opening inventory on 1 January 2019 for finished goods, work-in-process and direct materials are RM540,000, RM195,000 and RM90,000, respectively. 2. Utility, insurance, supplies and other expenses for factory and office are allocated as below: Factory Office Utility expenses 40% 60% Insurance expenses 50% 50% Supplies expenses 20% 80% Other expenses 10% 90% REQUIRED: (a) Prepare the Statement of Cost of Goods Manufactured for the year ended 31 December 2019. (b) Prepare the Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2019.
Part (a)
STATEMENT OF COST OF GOODS MANUFACTURED
FOR THE YEAR ENDED 31 DECEMBER, 2019
Part (b)
STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER, 2019
Working Note
Utility Expenses allocation
Factory = RM135,000 * 40% = RM54,000
Office = RM135,000 * 60% = RM81,000
Insurance Expense allocation
Factory = RM60,000 * 50% = RM30,000
Office = RM60,000 * 50% = RM30,000
Supplies Expense allocation
Factory = RM75,000 * 20% = RM15,000
Office = RM75,000 * 80% = RM60,000
Other Expenses allocation
Factory = RM90,000 * 10% = RM9,000
Office = RM90,000 * 90% = RM81,000
All the best...