Question

Balances 1 January 2000 R

Raw materials 20 000

Work in progress 30 000

Finished goods 55 000

Direct wages due 400

Direct wages prepaid 200

Electricity due 800

Purchases of raw materials for the year 245 000

Carriage inwards 3 000

Customs duty 4 000

Purchases returns 5 000

Raw materials costing R10 000 sold 18 000

Direct wages paid 90 000

Electricity paid 3 400

Insurance, factory 1 200

Repairs to equipment (factory) 2 740

Returns inwards 10 000

Sales 792 000

Land and buildings at cost 200 000

Equipment (factory) at cost 60 000

Provision for unrealised profit on stock

of finished goods 5 500

Office furniture at cost 14 000

Motor vehicles at cost 50 000

Rates (factory) 4 800

Water (75% factory) 4 200

Stationery and printing (factory) 5 100

Factory maintenance 12 000

Postage and telephone (factory) 1 800

Accumulated depreciation: office furniture 5 600

equipment 24 000

motor vehicles 15 000

Other expenses (sundry) 235 240

Further information

1. R

Balances 31 December: Raw materials 30 000

Work in process 24 000

Electricity due 600

Direct wages due 960

Finished goods ?

Stock of finished goods had not been taken at 31 December 2000, but the business works on a gross profit mark-up percentage of 50% on turnover. This calculation is based on the price at which manufactured goods are delivered to the sales department by the factory.

2. Depreciation to be provided:

Factory equipment at 10% per annum on cost.

Office furniture at 5% per annum on cost.

Motor vehicles at 20% per annum on cost.

Required

Draw up the production cost statement and income statement of the business for the year ended 31 December 2000.