FA

BBFA1023 FINANCIAL ACCOUNTING
2015-TL
Tutorial 6 Manufacturing Account

Question 1
Additional information:
Amilia was a sole proprietor who started off her business as an apparel
manufacturer. Following was the trial balance as at 31 December:
1. Closing raw materials as at 31 December was amounted to RM21,760.

Closing finished goods was valued at RM31,680.
Building
Motor vehicles
Machinery
Accumulated depreciation as at 1 January
Building
Motor vehicles
Machinery
Direct wages
Trade receivables
Trade payables
Royalties
Sales
Other distribution costs
Other administrative expenses
Bank overdraft
Purchases of raw materials
Opening inventories as at 1 January
Raw materials
Finished goods
Utilities
Telephone expenses
Salaries of factory supervisors
Capital
Drawings
Debit
RM
225,000
100,000
120,000
Credit
RM
25,500
18,900
24,850
50,900
16,000
2. Depreciation rate for non-current assets were:

Building
2% per annum on cost
Motor vehicles 10% per annum using reducing balance basis
Machineries
10% per annum using straight-line basis
3. Depreciation on building is to be split equally among the divisions.
4. Shared expenses were apportioned to cost of sales, distribution costs and
administrative expenses in the following ratio:
14,100
18,000
392,870
39,700
56,000
Depreciation on motor vehicles

Utilities
Telephone expenses
Factory
2
3
1
Warehouse
3
1
1
9,800
102,400
Required:
Prepare for Amilia, the sole proprietor the:
20,980
25,000
18,000
8,980
19,800
(a) Manufacturing account for the year ended 31 December;

(b) Statement of profit or loss for the year ended 31 December; and
340,000
5,260
826,020
(c) Statement of financial position as at 31 December.

826,020
Office
1
1
3
Question 2
Summer Manufacturing Bhd. is a small company manufacturing and sells its
apparels to departmental chains.
Below was the trial balance of Summer Manufacturing Bhd. as at 31
December:
Factory building
Office building
Plant and machinery
Motor vehicles
Accumulated depreciation as at 1 January:
Factory building
Office building
Plant and machinery
Motor vehicles
Opening inventories as at 1 January:
Raw materials
Work-in-progress
Finished goods
Revenue
Import duties on raw materials
Carriage inwards on raw materials
Carriage outwards
Receivables and Payables
Cash at bank
Telephone expenses
Utilities
Royalties paid
Salaries for factory supervisors
Salaries for office staffs
Wages for factory workers
Tax paid
Debit
RM
365,000
220,000
168,900
51,000
Credit
RM
2015-TL
Repair and maintenance for plant and

machinery
Upkeep of office building
Ordinary share capital of RM2.00 each
Share premium
Retained earnings as at 1 January
13,210
4,200
1,666,590
400,000
10,000
154,420
1,666,590
Additional information:
1. Inventories as at 31 December were:
101,890
36,070
31,570
14,000
RM
Raw materials
25,780
Work-in-progress
11,420
Finished goods
50,000
Part of the finished goods stated above at cost of RM10,000 has net
realizable value of RM9,300.
2. Utilities in arrears as at 31 December was RM2,300.
3. On 30 April 2011, a receivable which was previously written off repaid
its balance in full, RM12,000. This was omitted from the accounting
records.
54,600
9,570
36,500
878,640
475,100
14,360
4,020
1,600
25,000
15,000
14,500
6,900
24,500
36,800
21,050
34,780
70,000
4. Total royalties payable for goods manufactured during the year

amounted to RM39,650.
40,000
5. Salaries of factory supervisors paid in advance as at year end amounted

to RM2,380.
6. Depreciation on non-current assets should be provided as below:
Factory building:
2% per annum using straight-line method
Office building:
1% per year on cost
Plant and machinery: 10% per annum using reducing balance basis
Motor vehicles:
15% per annum using reducing balance basis
7. Common expenses were

shared among factory,
warehouse and office at the
ratio stated below:
Telephone expenses
Utilities
Motor vehicle expenses
8. During the year, the
Company paid 3.5%
dividend to its ordinary
shareholders. However, this
entry was omitted from the
records.
9. Tax expenses for the year
RM63,800.
b)3 Amilia
Statement of Profit or Loss for the year ended 31st December
RM
RM
Sales
Less: Cost of Sales
Opening Inventory of Finished Goods
Add: Production of Finished Goods
Less: Closing
Inventory ofOffice
Finished Goods
Factory
Warehouse
%
%
%
15
20
65
Less:
Distribution30
Expenses
40 Selling &30
Other
distribution
cost
20
60
20
Depreciation on Building [(2% x 225,000)/3]
Depreciation on MV([100,000 -18,900] x10% x3/6)
Utilities (18,000 x 1/5)
Telephone Expenses (8,980 x 1/5)
2015-TL
RM
392,870
25,000
219,119
244,119
(31,680)
(212,439)
180,431
39,700
1,500
4,055
3,600
1,796
50,651
Less: Administrative Expenses

Other administrative expenses
56,000
1,500
1,352
3,600
5,388
ended 31 December was

67,840
Required:
Net Profit
Prepare for Summer Manufacturing Bhd.:

(a) Schedule of allocation of expenses;
(b) Manufacturing account for the year ended 31 December;
(c) Statement of profit or loss for the year ended 31 December; and
(d) Statement of financial position as at 31 December.
Q1.
118,491
61,940
a) Amilia
Manufacturing Account for the year ended 31 December
RM
Opening inventory - raw materials
Less: Closing inventory - raw materials
RM
20,980
102,400
(21,760)
Cost of raw materials consumed

Direct labour/wages
Direct expenses
101,620
50,900
18,000
Prime cost
Overheads
Salaries of factory supervisor
Depreciation on Machinery (120,000 x 10%)
170,520
Production Cost of Finished Goods
2,703
10,800
1,796
19,800
1,500
12,000
48,599
219,119
2015-TL
b) Amilia
Statement of Financial Position for the year ended 31st December
RM
RM
RM
Non- Current Assets
Building
225,000
Less: Accumulated Dep.
(30,000)
195,000
Motor Vehicles
100,000
Less: Accumulated Dep.
(27,010)
72,990
Machinery
120,000
Less: Accumulated Dep
(36,850)
83,150
351,140
Current Assets
Inventory:
Raw Materials
21,760
Finished Goods
31,680
Trade Receivables
16,000
69,440
420,580
Equity
Opening Capital
340,000
Add: Net Profit
61,940
401,940
Less: Drawings
(5,260)
Closing Capital
396,680
Current Liabilities
Trade Payables
Bank Overdraft
14,100
9,800
23,900
420,580
2015-TL
Q2.
a)
2015-TL
a) Summer Manufacturing Bhd.

Manufacturing Account for the year ended 31 December
Summer
Schedule of
Carriage Outwards
Telephone Expenses (15:20:65)
Utilities (40:30:30) 6,900+2,300
Salaries of Factory Supervisor (36,800
+2,380)
Salaries of Office Staff
Repairs & Maintenance for P&M
Upkeep of Office Building
Depreciation Factory Building
Depreciation Office Building
Depreciation Plant and Machinery
Depreciation Motor Vehicles
RM
PO
RM
2,175
3,680
34,420
13,210
7,300
13,733
1,110
75,628
Opening inventory - raw materials

SD
AD
Total
RM
RM
RM
Import
duties on raw
1,600
- materials
1,600
Carriage
on raw materials
2,900inwards9,425
14,500
2,760
2,760
9,200
34,420
Less: Closing inventory - raw materials
Cost of raw materials consumed
21,050
21,050
Direct -labour/wages13,210
Direct -expenses 4,200
4,200
7,300
Prime -cost
2,200
2,200
Production Overheads
13,733
3,330
1,110
5,550
Opening
W.I.P 126,963
10,590inventories
40,745
Closing Inventories W.I.P
Production Cost of Finished Goods
RM
54,600
475,100
14,360
4,020
548,080
(25,780)
522,300
34,780
39,650
596,730
75,628
672,358
9,570
(11,420)
670,508
Manufacturing Bhd.
Allocation of Expenses
RM
Revenue
Less: Cost of Sales
Opening Inventory of Finished Goods
Add: Production of Finished Goods
Less: Closing Inventory of Finished Goods
RM
878,640
36,500
670,508
244,119
(49,300)
(657,708)
220,932
Add; Other Income

Bad Debts Recovered
Distribution Costs
Administrative Costs
Profit Before Tax
Tax expenses
Profit After Tax
Dividend (400,000 x 3.5%)
Retained Profit for the year
Retained profit b/d
Retained profit c/d
Summer Manufacturing Bhd.
12,000
232,932
(10,590)
(40,745)
181,597
(63,800)
117,797
(14,000)
103,797
154,420
258,217
Statement of Profit or Loss for the year ended 31st December
b)
2015-TL
d) Summer Manufacturing Bhd.

Statement of Financial Position for the year ended 31st December
RM
RM
RM
Non- Current Assets
Cost
Acc Dep
NBV
Factory Building
365,000
109,190
255,810
Office Building
220,000
38,270
181,730
Plant and Machinery
168,900
45,303
123,597
Motor Vehicles
51,000
19,550
31,450
804,900
212,313
592,587
Current Assets
Inventory:
Raw Materials
Work In Progress
Trade Receivables
Prepaid Factory Supervisors Salary
Tax Recoverable (63,800 70,000)
Bank (15,000 + 12,000 14,000)
25,780
11,420
49,300
86,500
25,000
2,380
6,200
13,000
133,080
725,667
Financed by:
Ordinary Share Capital
Reserves
Share Premium
Retained Earnings
40,000
10,000
258,217
668,217
Current Liabilities
Trade Payables
Accrued Utilities
Accrued Royalties (19,650 24,500)
40,000
2,300
15,150
57,450
723,667
2015-TL

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BBFA1023 FINANCIAL ACCOUNTING

Tutorial 6 Manufacturing Account

1. Closing raw materials as at 31 December was amounted to RM21,760.

2. Depreciation rate for non-current assets were:

Depreciation on motor vehicles

(a) Manufacturing account for the year ended 31 December;

(c) Statement of financial position as at 31 December.

BBFA1023 FINANCIAL ACCOUNTING

Repair and maintenance for plant and

4. Total royalties payable for goods manufactured during the year

5. Salaries of factory supervisors paid in advance as at year end amounted

BBFA1023 FINANCIAL ACCOUNTING

7. Common expenses were

Less: Administrative Expenses

ended 31 December was

Prepare for Summer Manufacturing Bhd.:

BBFA1023 FINANCIAL ACCOUNTING

Cost of raw materials consumed

Production Cost of Finished Goods

BBFA1023 FINANCIAL ACCOUNTING

BBFA1023 FINANCIAL ACCOUNTING

a) Summer Manufacturing Bhd.

Opening inventory - raw materials

BBFA1023 FINANCIAL ACCOUNTING

Add; Other Income

Statement of Profit or Loss for the year ended 31st December

d) Summer Manufacturing Bhd.

BBFA1023 FINANCIAL ACCOUNTING

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