Easyway Limited produced disposable products for the health sector. Information available for the year ended...
FINANCIAL
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.
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 |
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