2023 WAEC Accounts - Principles of Accounts Theory Easyway Limited produced disposable products for the health sector. Information available for the year ended...

WAEC 2023

Easyway Limited produced disposable products for the health sector.

Information available for the year ended 31st December 2021 is as follows:

	GH⊄
Sales	342000
Raw materials purchased	140500
Direct labour	70300
Depreciation of plant and machinery	24400
Delivery expenses	10000
Discounts allowed	5000
Direct expenses	10000
Rent	12000
Electricity	13000
Depreciation of vehicles	5600

Stocks:	01/01/2021	31/12/2021
	GH⊄	GH⊄
Raw materials	60400	52600
Work-in-progress	45000	40200
Finished goods	39200	20900

Additional information
Apportion rent, electricity and depreciation of vehicles to factory and office in the ratio 3:2 respectively.

You are required to prepare Manufacturing, Trading, Profit and Loss Account for the year ended 31st December 2021.

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Explanation

EasyWay Limited
Manufacturing, Trading, Profit and Loss Account for the year ended 31st December, 2021

	GH⊄			GH⊄
Opening stock of raw materials	60400		Cost of production	276160
Add purchases of raw materials	140500
Cost of raw materials available	200900
Less closing stock of raw materials	52600
Cost of raw materials consumed	1483000
Add: Direct labour	70300
Direct expenses	10000
Prime cost	228600
FACTORY OVERHEAD:
Depreciation of plant and machinery	24400
Factory rent (3/5 x 12000)	7200
Factory electricity (3/5 x 13000)	7800
Depreciation of vehicles	3360	42760
		271360
Add opening stock work in progress		45000
		316360
Less closing stock of work in progress		40200
Cost of production		276160		276160
Opening stock of finished goods		39200	Sales	342000
Add cost of production		276160
Cost of goods available		315360
Less closing stock of finished goods		20900
Cost of goods sold		294460
Gross profit c/d		47540
		342000		342000
Office rent (2/5 x 12000)		4800	Gross profit b/d	47540
Office electricity (2/5 x 13000)		5200
Depreciation of vehicles (2/5 x 5600)		2240
Delivery expenses		10000
Disount allowed		5000
Net profit c/d		20300
		47540		47540