Question

From the following Account Balance and additional information, you are required to prepare for the year ended 30 June 2016. All figures exclude GST where relevant.

(a) Manufacturing Statement showing each element of cost;

(b) Income Statement.

Amalfi Manufacturing Co. — Account Balances as at 30 June 2016
	Dr $	Cr $
Inventories 1 July 2015:
Finished Goods	10,000
Raw Materials	18,000
Factory Supplies	4,500
Work In Progress	5,500
Purchases:
Finished Goods	35,000
Raw Materials	100,000
Factory Supplies	10,000
Direct wages	80,000
Indirect wages	20,000
Factory Overhead	45,400
Sales		480,000
Freight inwards: – Finished goods	1,000
– Raw materials	5,000
Advertising	4,800
Freight outwards	6,200
Office salaries	30,000
Office rent and other expenses	12,000
Trade creditors		18,000
Factory land	40,000
Factory buildings	95,000
Accumulated depreciation on factory buildings		8,000
Factory plant	100,000
Accumulated depreciation on factory plant		15,000
Trade Accounts Receivable	25,000

Inventory valuations at 30 June 2016
Finished Goods	$11,000
Raw Materials	$19,000
Factory Supplies	$5,500
Work In Progress	$8,500

Answer 1

MANUFACTURING STATEMENT:
			Amount $
WIP OB			5500
add: RM:
OB	18000
Add: Purch RM	100000
Add:Freight I/w	5000
Less:CB	-19000
RM used		104000
Direct wages		80000
Factory Overhead:
Indirect wages	20000
overhead exp.	45400
Factory supplies:
OB	4500
add:Purch. Fact. Suppl.	10000
Less:CB	-5500
Factory overhead used		74400
total manufacturing added			258400
Total Work in Process			263900
Less: WIP CB			-8500
Cost of Goods Manufactured			255400
INCOME STATEMENT:
		Amount $
Sales		480000
Less: Cost of Goods Sold:
FG Ob	18000
Add:Purchases	35000
Add:Freight Inwards FG	1000
Add:Cost of Goods Manufactured	255400
Less: FG Closing	-11000
Cost of Goods Sold		298400
Gross Profit		181600
Less:Selling and Admin. Expenses:
Advertising	4800
Freight Outwards	6200
Office salaries	30000
Off. Rent and other exp.	12000
Total Selling & Admin. Exp.		53000
Net Operating Income		128600