{"id":2984,"date":"2023-10-04T08:49:24","date_gmt":"2023-10-04T08:49:24","guid":{"rendered":"http:\/\/localhost\/ecole9ja\/?p=2984"},"modified":"2023-10-04T08:53:08","modified_gmt":"2023-10-04T08:53:08","slug":"week-6-ss2-first-term-financial-accounting-notes","status":"publish","type":"post","link":"https:\/\/ecolebooks.com\/nigeria\/posts\/week-6-ss2-first-term-financial-accounting-notes\/","title":{"rendered":"Week 6 &#8211; SS2 First Term Financial Accounting Notes"},"content":{"rendered":"<p>\u00a0WEEK 6<\/p>\n<h2>MANUFACTURING ACCOUNTS<br \/>\n<\/h2>\n<p>INTRODUCTION<br \/>\nThe manufacturing account is an account that is prepared so as to identity all the manufacturing costs incurred in bringing the product to a marketable state.<br \/>\nManufacturing is the process of making goods by hand or by machine. The costs involved in manufacturing process are principally in two main divisions. <\/p>\n<ul>\n<li>The cost of raw materials; and\n<\/li>\n<li>The cost of coverting raw materials into finished goods and this cost is in two main categories\n<\/li>\n<\/ul>\n<ol>\n<li>Manufacturing costs and\n<\/li>\n<li>Non \u2013 manufacturing costs\n<\/li>\n<\/ol>\n<p>\u00a0<\/p>\n<h3>MANUFACTURING COSTS: Manufacturing costs are of two main types<br \/>\n<\/h3>\n<ol>\n<li>Direct costs; and\n<\/li>\n<li>Indirect costs (also called factory overheads)\n<\/li>\n<\/ol>\n<p>Direct costs applies to these costs which can be readily tractor to the products and is further broken down into: <\/p>\n<ol>\n<li>Direct material cost\n<\/li>\n<li>Direct labour cost\n<\/li>\n<li>Direct expenses\n<\/li>\n<\/ol>\n<p>DIRECT MATERIAL COST: Direct materials are basic substances or raw materials form which a product is made. Examples Soya beans for vegetable oil, palm oil for soaps, animals skin for shoe etc.<br \/>\nCost that are directly associated with these raw materials in the finished product is called the direct material cost.<br \/>\nDIRECT LABOUR COST: It will take human effort to change the form on direct materials into finished goods. the wages of those employees (factory workers who perform this task is considered as a direct labour cost). Example of a direct labour cost is the wage of a machine operator.<br \/>\nDIRECT EXPENSES: There are expenses other than direct materials cost and direct labour cost that are incurred solely in producing the goods. They include the cost of special designs and line of specialised equipment for a particular job.<br \/>\nINDIRECT COSTS: These are costs which cannot be traced directly to the product but which all the same are part of the cost of the product. In determining which costs to treat as direct costs materiality of such items must be taken into cognisance.<br \/>\nManufacturing overhead cost include indirect material costs such as give used in furniture making, lubricate and supplies of materials for repairs and maintenance. Indirect labour costs such as the wages of factory foremen and supervisors.<\/p>\n<p>\u00a0NON \u2013 MANUFACTURING COSTS: These are administrative and marketing costs and are not included in the cost of manufacturing the product. These costs are not relevant in the manufacturing section of the account but are approximately treated in the profit and loss section.<\/p>\n<h3>TERMINOLOGIES USED IN MANUFACTURING ACCOUNTS<br \/>\n<\/h3>\n<ol>\n<li>PRIME COST: This is the total cost of direct materials direct wages and direct expenses.\n<\/li>\n<li>Total factory cost (cost of production): This represent prime cost plus indirect factory costs (manufacturing overheads)\n<\/li>\n<li>\n<div>Inventory: This refers to stock. A manufacturing concern has three categories of inventories:\n<\/div>\n<ol>\n<li>Stock of raw materials: This is the quantity of unused portion of raw materials bought.\n<\/li>\n<li>Stock of work-in-progress: These are partly finished goods, semi-manufactured goods and incomplete work at the end of a financial period. They are goods that have not been completed in the factory at the time of preparing the final accounts. there could be opening work-in-progress and or closing work-in-progress. This is valued at start and at the end of the trading period\n<\/li>\n<li>Stock of finished goods: This is the quality of completed goods. it is also valued at the beginning and at the end of the trading period.\n<\/li>\n<li>Consumables: These are supplies and components purchased for incorporation into the final products and maintenance of machines.\n<\/li>\n<li>Financial charges: These are expenses and interest incurred in servicing loans e.g. interest on overdraft, discount allowed and interest on loan\n<\/li>\n<li>Total cost: This represents all the costs involved in bringing the finished goods down to the consumers which include prime costs, factory overheads, administrative, selling and distribution expenses and financial charges.\n<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<p>\u00a0NOTE<br \/>\nThe costs involved can be summarised as follows:<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi1.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi2.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi3.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi4.png\" alt=\"\"\/>Direct materials<br \/>\nDirect labour\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Prime cost\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total cost<br \/>\nDirect expenses<br \/>\n\u00a0\u00a0\u00a0\u00a0PLUS<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi5.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi6.png\" alt=\"\"\/>Factory overheads<br \/>\n\u00a0\u00a0\u00a0\u00a0PLUS<br \/>\nAdministrative expenses<br \/>\nSelling and distribution expenses<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi7.png\" alt=\"\"\/>Financial charges <\/p>\n<p>\u00a0<br \/>\n\u00a0NOTE<br \/>\nThe following items are included in manufacturing or factory overheads<\/p>\n<ul>\n<li>Indirect wages\n<\/li>\n<li>Heat and power\n<\/li>\n<li>Lubricants\n<\/li>\n<li>General factory expenses\n<\/li>\n<li>Rent and rates on factory\n<\/li>\n<li>Depreciation of plant and machinery\n<\/li>\n<li>Depreciation of factory buildings and tools\n<\/li>\n<li>First and expenses\n<\/li>\n<li>Factory consumable or supplies\n<\/li>\n<li>Indirect materials\n<\/li>\n<li>Small tools used\n<\/li>\n<li>Grease and oil\n<\/li>\n<li>Other utilities\n<\/li>\n<\/ul>\n<p>\u00a0<\/p>\n<h3>PREPARATION OF THE MANUFACTURING ACCOUNT<br \/>\n<\/h3>\n<p>The accounting divisions of manufacturing concerns are in three main segments which are:<\/p>\n<ol>\n<li>Manufacturing account or production account section: Under this section the three main components of cost of goods manufactured can be seen at a glance. It is therefore used in ascertaining the cost of production for the period.\n<\/li>\n<li>Trading account section: This is principally used for determining the gross profit resulting from trading operations during the period.\n<\/li>\n<li>Profit and loss account section: This is prepared mainly for ascertaining the net profit of the enterprises for the given period.\n<\/li>\n<\/ol>\n<p>FORMAT<br \/>\nA B C<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi8.png\" alt=\"\"\/>Manufacturing, trading, profit and loss account for the year ended 31<sup>st<\/sup> March<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi9.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi10.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi11.png\" alt=\"\"\/>Raw materials (RM)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Cost of production b\/d\u00a0\u00a0\u00a0\u00a0xx<br \/>\nOpening stock\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nAdd: Purchases\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nCarriage inwards\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi12.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nLess: returns outwards\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(xx)<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi13.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi14.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nRm available for used\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi15.png\" alt=\"\"\/>Less closing stock RM\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx\u00a0\u00a0\u00a0\u00a0<br \/>\nCost of R.M consumed\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nDirect wages\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nRoyalties \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi16.png\" alt=\"\"\/>Direct expenses \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nPRIME COST\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nFactory overheads (Nite)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx\u00a0\u00a0\u00a0\u00a0<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi17.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi18.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi19.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi20.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi21.png\" alt=\"\"\/>Add: Opening in. I. P\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi22.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi23.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi24.png\" alt=\"\"\/>Cost of production\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nFinished goods \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Sales \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi25.png\" alt=\"\"\/>Opening stock\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx\u00a0\u00a0\u00a0\u00a0les: Returns inwards\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi26.png\" alt=\"\"\/>Add cost of production\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nGoods available for sale\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi27.png\" alt=\"\"\/>Less closing stock\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nCost of sales \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi28.png\" alt=\"\"\/>Gross profit c\/d\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi29.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi30.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi31.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Gross profit b\/d\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nAdministrative Expenses<br \/>\nAdmin salaries \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nMaintenance of building \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nDepreciation of accounting machine\u00a0\u00a0\u00a0\u00a0xx<br \/>\nManager salaries \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nLegal charges \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi32.png\" alt=\"\"\/>Accounting charges \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nSelling and distribution expenses<br \/>\nCommission on sales\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nAdvertising \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nSalaries of salesmen \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nDepreciation on delivery van\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nCarriage outwards\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nBad debts\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi33.png\" alt=\"\"\/>Provision for doubtful debts\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nFinancial charges \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nInterest on loan\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nBank charges \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi34.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi35.png\" alt=\"\"\/>Discount allowed \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx\u00a0\u00a0\u00a0\u00a0xx<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi36.png\" alt=\"\"\/>Net profit \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi37.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nIllustration 1: The following shows the figures extracted from the books of Ojolo, a manufacturer for the year ended 31<sup>st<\/sup> December, 1999.<br \/>\nStock of finished goods\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0#<br \/>\n\u00a0\u00a0\u00a0\u00a0January 1<sup>st<\/sup>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02,532<br \/>\n\u00a0\u00a0\u00a0\u00a0December 31<sup>st<\/sup> \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a03,569<br \/>\nStock of raw materials \u00a0\u00a0\u00a0\u00a0<br \/>\n\u00a0\u00a0\u00a0\u00a0January 1<sup>st<\/sup> \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,608<br \/>\n\u00a0\u00a0\u00a0\u00a0December 31<sup>st<\/sup> \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,432<br \/>\nSales \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a092,800<br \/>\nOffice rent\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0525<br \/>\nOffice rates \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0200<br \/>\nPurchases of raw materials \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a019,000<br \/>\nCarriage inward on raw materials \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0471<br \/>\nManufacturing wages \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a026,430<br \/>\nFactory expenses \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,828<br \/>\nDepreciation\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<br \/>\nPlant and machinery \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a03250<br \/>\nDelivery vans \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0625<br \/>\nStock of work in progress<br \/>\n\u00a0\u00a0\u00a0\u00a0January 1<sup>st<\/sup> \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0874<br \/>\n\u00a0\u00a0\u00a0\u00a0December 31<sup>st<\/sup> \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0947<br \/>\nFactory fuel \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,835<br \/>\nAdvertising \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0517<br \/>\nVan running expenses \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02,315<br \/>\nSales men&#8217;s commission \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0713<br \/>\nMaintenance of factory equipment\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a010,800<br \/>\nLighting (3\/5 factory)<br \/>\n\u00a0\u00a0\u00a0\u00a0(2\/5 office)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a08,000<br \/>\nSalaries (factory 1,500)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a05,000<br \/>\nInsurance (factory 3,200)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a04,480<br \/>\nYou are required to prepare the manufacturing, trading, profit and loss account for the year ended 31<sup>st<\/sup> December 1999.<\/p>\n<p>\u00a0<br \/>\n\u00a0<\/p>\n<h3>TRANSFER PRICING MARKET VALUE OF GOODS MANUFACTURED<br \/>\n<\/h3>\n<p>The usual practice is to transfer the goods produced to the trading account at cost price. But the firms may decide to transfer to the trading account at current market price irrespective of cost. The manufacturing account will show a balance (profit or loss) which will be transferred to profit and loss account. The goods may also be transferred to trading account at cost price plus a fixed percentage. <\/p>\n<p>\u00a0Illustration 2<br \/>\nBODMAS LTD is a manufacturing firm of kitchen furniture. The following information was extracted from the books of the company for the year ended 31<sup>st<\/sup> Dec., 1998.<\/p>\n<p>\u00a0<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi38.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi39.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi40.png\" alt=\"\"\/>DR\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0CR<br \/>\nPlant and Machinery \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a072,000<br \/>\nCapital \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0148,800<br \/>\nMotor vehicle \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a036,000<br \/>\nLoose tools at cost (office)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a010,800<br \/>\nSales \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0204,000<br \/>\nPurchases of raw materials \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a051,000<br \/>\nFactory wages\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a048,800<br \/>\nLight and power \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a06,000<br \/>\nMachinery repairs \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a09,120<br \/>\nMotor vehicles running expenses\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a014,400<br \/>\nRent and insurance \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a013,920<br \/>\nAdministrative expenses \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a010,800<br \/>\nDebtors \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a019,800<br \/>\nCreditors \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a013,440<br \/>\nDistribution staff salaries \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a015, 600<br \/>\nCash in hand \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a015,000<br \/>\nDrawings \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a07,200<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi41.png\" alt=\"\"\/>Stock of raw materials \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0                 600 \u00a0\u00a0\u00a0\u00a0<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi42.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0366,240\u00a0\u00a0\u00a0\u00a0366,240\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<br \/>\nAdditional information<\/p>\n<ol>\n<li>Light and power charges accrued at 31<sup>st<\/sup> Dec., 1998 amounted to #1000 and insurance prepared at the same date totalled #960.\n<\/li>\n<li>\n<div>Stocks were valued at cost on 31<sup>st<\/sup> Dec., 1998 as follows\n<\/div>\n<p>Raw materials #8,400<br \/>\nFinished goods #12,000\n<\/li>\n<li>Goods manufactured during the year are to be transferred to the trading account at #114,000\n<\/li>\n<li>Motor vehicle expenses are to be allocated equally to factory expenses and general and general administrative expenses.\n<\/li>\n<li>Plant and machinery and motor vehicle are to be depreciated at the rate of 10% and 25% respectively\n<\/li>\n<\/ol>\n<p>You are to prepare:<\/p>\n<ol>\n<li>Manufacturing, trading, profit and loss account for the year ended 31<sup>st<\/sup> Dec., 1998\n<\/li>\n<li>Balance sheet as at that date\n<\/li>\n<\/ol>\n<p>Solution<br \/>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0BODMAS LTD<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi43.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi44.png\" alt=\"\"\/>Manufacturing, trading, profit and loss account for the year ended 31<sup>st<\/sup> Dec. 1998<br \/>\nOpening stock of R.M\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0600\u00a0\u00a0\u00a0\u00a0Goods transferred to trading \u00a0\u00a0\u00a0\u00a0     114000<br \/>\nAdd: purchases of R.M\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a051,000<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi45.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a051,600<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi46.png\" alt=\"\"\/>Less: closing stock R.M\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a08,400<br \/>\nCost of RM consumed \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a043,200<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi47.png\" alt=\"\"\/>Add: Factory wages \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a046,800<br \/>\nPRIME COST\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a090,000<br \/>\nFactory Overhead<br \/>\nMachine repairs \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a09,120<br \/>\nMotor running exp.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a07,200<br \/>\nDepreciation<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi48.png\" alt=\"\"\/>Plant and machinery \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a07,200\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<br \/>\n23,520\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi49.png\" alt=\"\"\/>Cost of production \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0            113,520<br \/>\nProfits on goods manufactured \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0     480<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi50.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi51.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0            114,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0     114000<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi52.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi53.png\" alt=\"\"\/>Goods transferred \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0            \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0sales\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0             204,000<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi54.png\" alt=\"\"\/>Less: closing stock F.G\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a012,000<br \/>\nCost of goods sold \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0            102,000<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi55.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi56.png\" alt=\"\"\/>Gross profit \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0            102,000<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi57.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0            204,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0        204000<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi58.png\" alt=\"\"\/>Expenses \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Gross profit b\/d\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0     102000<br \/>\nLight &amp; power \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a07000\u00a0\u00a0\u00a0\u00a0Profit on manufacture                            480\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<br \/>\nMotor running expenses \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a07200        \u00a0\u00a0\u00a0\u00a0Net loss                                      2080\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<br \/>\nRent and insurance \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a012,960<br \/>\nAdministrative staff salaries \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a037,200<br \/>\nAdministrative expenses \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a010,800<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi59.png\" alt=\"\"\/>Distributive staff salaries \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a015,600<br \/>\nDepreciation<br \/>\nMotor vehicle \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a09,000<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi60.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi61.png\" alt=\"\"\/>Loose tools \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a04,800<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi62.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi63.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0          104,500\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0       104500    <\/p>\n<p>\u00a0<br \/>\n\u00a0<br \/>\n\u00a0BODMAS LTD<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi64.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi65.png\" alt=\"\"\/>Balance sheet as at 31<sup>st<\/sup> December, 1998<br \/>\nCapital \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0148,800\u00a0\u00a0\u00a0\u00a0             Fixed Assets<br \/>\nLess: Net loss\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02080\u00a0\u00a0\u00a0\u00a0      \u00a0\u00a0\u00a0\u00a0            Motor Vehicle (36,000 \u2013 7,200)\u00a0\u00a0\u00a0\u00a027,000<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi66.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 146,720<br \/>\nLess: drawings \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0                  7,200\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0              P &amp; M (72,000 \u2013 7,200) 64800\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi67.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0139,520<br \/>\nCurrent liabilities<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi68.png\" alt=\"\"\/>Creditors \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a013,440\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Loose tools (10,800 \u2013 4,800       6000 97800<br \/>\nLight and power accrued \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<br \/>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Current Assets<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi69.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi70.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Stocks: R.M 8400\u00a0\u00a0\u00a0\u00a0,\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0                          Furnished goods 12000 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0           \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0              Debtors              19800 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0           \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Cash in hand    15000 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0           \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Insurance \u00a0\u00a0\u00a0\u00a0960\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi71.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi72.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0153,960\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0     153960     \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<br \/>\nWorkings <\/p>\n<ol>\n<li>Light and power = 6000 + 1000 = #7000\n<\/li>\n<li>Insurance = 13,920 \u2013 960 = #12,760\n<\/li>\n<li>\n<div>Motor expenses = factory = \u00bd x 14440 = #7,200\n<\/div>\n<p>General Administrative expenses<br \/>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00bd x 14,440 = #7,200\n<\/li>\n<li>\n<div>Loose tools cost \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a010,800\n<\/div>\n<p>Depreciation \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a04,800<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi73.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi74.png\" alt=\"\"\/>Loose tools in hand \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a06,000\n<\/li>\n<li>Depreciation: plant and machinery = 10% x 72,000 = 7,200\n<\/li>\n<li>\n<div>Motor vehicle = 25% x 36,000 = #9000\n<\/div>\n<p>ASSINGNMENT<br \/>\nPage 310 question 2x\n<\/li>\n<\/ol>\n<p>\u00a0<\/p>\n<h2>PARTNERSHIP ACCOUNTS<br \/>\n<\/h2>\n<p>Under the partnership Act of 1890, partnership is defined as the relationship which exists between persons carrying on a business in common with a view of profit.<br \/>\nIt is an association between two and twenty persons who have agreed to share the profits who have agreed to share the profits of a business carrying on by all or any of them for benefit of all of them.<\/p>\n<h3>TYPES OF PARTNERS<br \/>\n<\/h3>\n<p>There are three principal types of partners namely:<\/p>\n<ol>\n<li>Active partner: This type of partner participates actively in management of the partnership&#8217;s business\n<\/li>\n<li>Sleeping or Dormant partner: this type of partner does not take any active part in the management of the partnership business. All he does is to contribute money into the partnership and then wait to receive his share of profit\n<\/li>\n<li>Nominal partner: This is a partner that has not capital contribution into the business but partners in the share of the profit. This is because, he has allowed his name to be used by other partners as a result of his good image,\n<\/li>\n<\/ol>\n<h3>REASONS FOR THE FORMATION OF PARTNERSHIP<br \/>\n<\/h3>\n<p>There are several reasons that make people opt for partnership business and some of them are:<\/p>\n<ol>\n<li>Where the capital need of the business cannot be adequately supplied or make available by a person.\n<\/li>\n<li>Where the experience and knowledge needed to carry on the business cannot be provided by an individual singlehandedly\n<\/li>\n<li>Where people are afraid of bearing all the risks associated with the business alone\n<\/li>\n<li>Where they want to make it a family business.\n<\/li>\n<\/ol>\n<h3>FEATURES OF PARTNERSHIP<br \/>\n<\/h3>\n<ol>\n<li>Capital is from members contribution\n<\/li>\n<li>Unlimited liabilities for partners\n<\/li>\n<li>Not a legal entity\n<\/li>\n<li>Limited membership\n<\/li>\n<li>Motive is profit\n<\/li>\n<li>Common participation in management\n<\/li>\n<li>Each partner is an agent of the business\n<\/li>\n<li>No special formalities in formation.\n<\/li>\n<\/ol>\n<h3>DEEDS OF PARTNERSHIP<br \/>\n<\/h3>\n<p>This is a document drawn up by the partners which will clarify the respective positions and duties of the partners in a business.<br \/>\nCONTENTS OF DEED OF PARTNERSHIP<\/p>\n<ol>\n<li>Name of the partners and other particulars\n<\/li>\n<li>Name of the business\n<\/li>\n<li>Signatories to the account\n<\/li>\n<li>Duration of the partnership\n<\/li>\n<li>Amount of capital to be contributed\n<\/li>\n<li>Right of each partner\n<\/li>\n<li>Duties of each partner\n<\/li>\n<li>Amount of salary to be paid\n<\/li>\n<li>The nature of the business\n<\/li>\n<li>Method of admission of a new partner\n<\/li>\n<li>Dissolution of partnership\n<\/li>\n<li>Registered office\n<\/li>\n<li>Partnership account procedures\n<\/li>\n<li>Terms and conditions\n<\/li>\n<li>Profit and loss sharing ratio\n<\/li>\n<li>Rate of interest on capital\n<\/li>\n<li>Rate of interest on drawings\n<\/li>\n<li>Valuation of goodwill\n<\/li>\n<\/ol>\n<h3>PARTNERSHIP ACCOUNTS<br \/>\n<\/h3>\n<p>CAPITAL ACCOUNT: The amount contributed by each partner into the business will be credited to his capital account. The firm can maintain or use either a fixed capital or fluctuating capital.<br \/>\n(i) FLUCTUATING CAPITAL ACCOUNT: The partners can maintain a fluctuating capital account, profit, interest on capital and salaries will be credited to the capital account and drawings and interest on drawings debited. In short, the balance of this account will change each year.<\/p>\n<p>\u00a0<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi75.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi76.png\" alt=\"\"\/><br \/>\n\t<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi77.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi78.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi79.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi80.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi81.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi82.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi83.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi84.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi85.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi86.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi87.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0A\u00a0\u00a0\u00a0\u00a0B\u00a0\u00a0\u00a0\u00a0C<\/p>\n<p>\u00a0<strong>Drawings \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x   \u00a0\u00a0\u00a0\u00a0 x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0Bal b\/f\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<br \/>\n<\/strong>Int. on drawings\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0Current bal\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0<br \/>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Share of profit\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<br \/>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Int on capital\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi88.png\" alt=\"\"\/>Bal c\/d\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0Salary \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi89.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<br \/>\nBal b\/d\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<\/p>\n<p>\u00a0(ii) Fixed Capital account and current account: The balance of capital will remain at the same figure during the partnership profit, interest on capital and salaries will be credited to a separate current account. Drawings and interest on drawings are debited.<br \/>\nNOTE: Examiners often ask for separate current and capital account.<\/p>\n<p>\u00a0Capital Account<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi90.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi91.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi92.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi93.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi94.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi95.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi96.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi97.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0A\u00a0\u00a0\u00a0\u00a0B\u00a0\u00a0\u00a0\u00a0C\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0A\u00a0\u00a0\u00a0\u00a0B\u00a0\u00a0\u00a0\u00a0C<br \/>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Bala b\/f\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<\/p>\n<p>\u00a0<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi98.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi99.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi100.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi101.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi102.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi103.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi104.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi105.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi106.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi107.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi108.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi109.png\" alt=\"\"\/><br \/>\n\t<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi110.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0A\u00a0\u00a0\u00a0\u00a0B\u00a0\u00a0\u00a0\u00a0C\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0A\u00a0\u00a0\u00a0\u00a0B\u00a0\u00a0\u00a0\u00a0C<br \/>\nDrawings \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0Bal b\/f\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<br \/>\nInt. on drawings\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0Int. on capital\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<br \/>\nBal c\/d\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0Int. on salary \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<br \/>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Share of profit\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<\/p>\n<p>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx\u00a0\u00a0\u00a0\u00a0xx\u00a0\u00a0\u00a0\u00a0xx\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx\u00a0\u00a0\u00a0\u00a0xx\u00a0\u00a0\u00a0\u00a0xx\u00a0\u00a0\u00a0\u00a0<br \/>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<br \/>\nPartners Loan: A partner may introduce cash by way of loan to the partnership. Any cash introduced will be credited to a loan account,<br \/>\nPartners Salaries: The agreement may provide that any of the partners who devote his time to the running of the business shall receive a fixed salary in addition to a share in the profits. Salary will be credited to the current account.<br \/>\nInterest on Capital: The partner may be paid interest on capital when they have contributed unequal amount. This is debited to profit and loss appropriation account and credited to current account.<br \/>\nDrawings: This is the amount withdrawn or taken out of the business by partners during the year. The drawings can be in cash or kind. It must be debited to the current account.<br \/>\nInterest on Drawings: Interest on drawings is introduced to prevent the partners from withdrawing cash unnecessarily from the business. This is calculated from the date of withdrawal to the end of the financial year. This is debited to the current account.<\/p>\n<h3>FINAL ACCOUNTS OF PARTNERSHIP<br \/>\n<\/h3>\n<p>The trading, profit and loss account are exactly the same as that of a Sole trader. But a partnership would have an extra section called &#8220;Appropriation account&#8221;<\/p>\n<p>\u00a0<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi111.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi112.png\" alt=\"\"\/>Partnership, Trading, Profit and loss account for the year ended 31<sup>st<\/sup> Dec. 1967<br \/>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Sales \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nOpening stock\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0less: Sales returns\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi113.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi114.png\" alt=\"\"\/>Add: purchases \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi115.png\" alt=\"\"\/>less: closing stock\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\ncost of goods sold\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi116.png\" alt=\"\"\/>Gross profit \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi117.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi118.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi119.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<br \/>\nGross profit b\/d\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Discount received \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nExpenses<br \/>\nRent \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nSalaries and wages\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nDepreciation\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nMotor expenses \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nStationery \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nBad debts\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nInterest on loans\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nSundry expenses \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nNet Profit\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<\/p>\n<p>\u00a0<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi120.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi121.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx\u00a0\u00a0\u00a0\u00a0<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi122.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi123.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n<p>\u00a0<br \/>\n\u00a0<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi124.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi125.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Profit and loss appropriation account<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi126.png\" alt=\"\"\/>Interest on capital\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Net profit b\/d \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nOjo \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Interest on drawings<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi127.png\" alt=\"\"\/>Ajayi\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Ojo \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nSalary \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Ajayi \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nOjo \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi128.png\" alt=\"\"\/>Ajayi\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<br \/>\nShare of profit<br \/>\nOjo 2\/3 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nAjayi 1\/3 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi129.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi130.png\" alt=\"\"\/><br \/>\n\t<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi131.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi132.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx<\/p>\n<p>\u00a0<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi133.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi134.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Balance sheet<br \/>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Fixed Assets<br \/>\nCapital \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0           Motor van\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nOjo \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0sF &amp; F\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi135.png\" alt=\"\"\/>Ajayi\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Land &amp; building\u00a0\u00a0\u00a0\u00a0x<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi136.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Premises \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<br \/>\nCurrent Account\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Current Assets<br \/>\nOjo \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Stock\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi137.png\" alt=\"\"\/>Ajayi\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Debtors \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nCurrent Liabilities \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Bills receivable \u00a0\u00a0\u00a0\u00a0x<br \/>\nBills payable\u00a0\u00a0\u00a0\u00a0x<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi138.png\" alt=\"\"\/>Loan \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Bank\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nCreditors\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Cash in hand \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nIncome in advance \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Income in arrears\u00a0\u00a0\u00a0\u00a0x<br \/>\nExpenses accrued\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Expenses are paid\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi139.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi140.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi141.png\" alt=\"\"\/><img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_0849_Week6SS2Fi142.png\" alt=\"\"\/>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0xx\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u00a0WEEK 6 MANUFACTURING ACCOUNTS INTRODUCTION The manufacturing account is an account that is prepared so&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,240],"tags":[],"class_list":["post-2984","post","type-post","status-publish","format-standard","hentry","category-posts","category-first-term-ss2-financial-accounting"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/2984","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/comments?post=2984"}],"version-history":[{"count":1,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/2984\/revisions"}],"predecessor-version":[{"id":2985,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/2984\/revisions\/2985"}],"wp:attachment":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/media?parent=2984"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/categories?post=2984"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/tags?post=2984"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}