{"id":3143,"date":"2023-10-04T11:59:36","date_gmt":"2023-10-04T11:59:36","guid":{"rendered":"http:\/\/localhost\/ecole9ja\/?p=3143"},"modified":"2023-10-04T12:01:08","modified_gmt":"2023-10-04T12:01:08","slug":"week-3-and-4-ss2-second-term-financial-accounting-notes","status":"publish","type":"post","link":"https:\/\/ecolebooks.com\/nigeria\/posts\/week-3-and-4-ss2-second-term-financial-accounting-notes\/","title":{"rendered":"Week 3 and 4 &#8211; SS2 Second Term Financial Accounting Notes"},"content":{"rendered":"<p>\u00a0<strong>WEEK THREE AND FOUR                                                             \u00a0\u00a0\u00a0\u00a0DATE: _______________<br \/>\n<\/strong><strong>TOPIC: MANUFACTURING ACCOUNTS<br \/>\n<\/strong><strong>CONTENT<br \/>\n<\/strong><\/p>\n<ul>\n<li>\n<div>Meaning of Manufacturing Accounts\n<\/div>\n<\/li>\n<li>\n<div>Purpose of Manufacturing Account\n<\/div>\n<\/li>\n<li>\n<div>Element of Cost of Production\n<\/div>\n<\/li>\n<li>\n<div>Layout of Manufacturing Account\n<\/div>\n<\/li>\n<li>\n<div>Transfer Pricing\n<\/div>\n<\/li>\n<li>\n<div>Practical Illustration\n<\/div>\n<\/li>\n<\/ul>\n<p>\u00a0<strong>MEANING OF MANUFACTURING ACCOUNTS<br \/>\n<\/strong>Manufacturing can simply be described as the transformation of raw materials into finished goods e.g. manufacturing companies like Nestle, Cadbury, PZ e.tc. These manufacturing firms do manufacture their goods or product before they are sold to their customer. They do not buy to sell but produce what they sell.<br \/>\nThere manufacturing companies prepare a final accounts called Manufacturing Account. <\/p>\n<p>\u00a0<strong>PURPOSE OF MANUFACTURING ACCOUNTS<br \/>\n<\/strong>Manufacturing Account are prepared to ascertain the cost of goods manufactured during the financial<br \/>\nyear. Therefore manufacturing accounts have the following purposes.<\/p>\n<ol>\n<li>\n<div>To ascertain the cost of production\n<\/div>\n<\/li>\n<li>\n<div>To determine the profit on the manufacturing process.\n<\/div>\n<\/li>\n<\/ol>\n<p>\u00a0<strong>ELEMENTS OF COST OF PRODUCTION<br \/>\n<\/strong><\/p>\n<ol>\n<li>\n<div><strong>COST OF PRODUCTION:<\/strong> This is the total expenditure incurred in the production of goods. Production costs include <strong>PRIME COST + FACTORY OVERHEADS<br \/>\n<\/strong><\/div>\n<\/li>\n<li>\n<div><strong>PRIME COST: <\/strong>These are cost directly related in the production process. It is also called Direct Cost which include: Direct materials, direct labour, direct expenses and any other direct expenditure. <strong><br \/>\n\t\t\t\t<\/strong><\/div>\n<ol>\n<li>\n<div>Direct materials cost: These are cost of raw materials\n<\/div>\n<\/li>\n<li>\n<div>Direct labour cost: These are cost of labour wages paid<strong><br \/>\n\t\t\t\t\t\t<\/strong><\/div>\n<\/li>\n<li>\n<div>Direct expenses: These are cost of other expenditure incurred in the production process.<strong><br \/>\n\t\t\t\t\t\t<\/strong><\/div>\n<\/li>\n<\/ol>\n<p>\u00a0<\/li>\n<li>\n<div><strong>FACTORY OVERHEADS: <\/strong>These are cost incurred in the running of the factory but not directly related to the production process. It is also called <strong>INDIRECT COST. <\/strong> They include; factory rent and rates, depreciation of plant and machinery. Indirect wages, upkeep of factory building\n<\/div>\n<\/li>\n<\/ol>\n<p>\u00a0<strong>Format of Manufacturing Trading Profit and Loss Account<br \/>\n<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0N       N\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0N<br \/>\nOpening stock of raw material \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Cost of production\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nAdd purchases of raw material\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nCarriage inward of raw material\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<br \/>\n\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0X<br \/>\nLoss closing stock or raw material net\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(x)<br \/>\nCost of raw material consumed\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nAdd direct wages\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nRoyalties\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nDirect expenses\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n\tPrime cost\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nFactory overheads:\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nFactory power\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nFactory rent &amp; rates\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nIndirect wages\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nFactory insurance\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nDepreciation of P &amp; M\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nFuel and power\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nLubricants\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<br \/>\n\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0X<br \/>\n<strong>Add<\/strong> opening stock W.I.P\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\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0X<br \/>\n<strong>Less<\/strong> closing stock W.IP\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0X<br \/>\n\tCost of production\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<strong>x<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n<strong>Manufacturing Trading, Profit and loss Account contd<br \/>\n<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0N\u00a0\u00a0\u00a0\u00a0N\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0N\u00a0\u00a0\u00a0\u00a0N<br \/>\nOpening stock of finished goods\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0sales\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n\tAdd cost of production \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nCost of good available for sale\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n<strong>Less<\/strong> closing stock of finished goods\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(x)<br \/>\nCost of goods sold\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nGross profit c\/d\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_1159_Week3and41.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\u00a0X \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n\tExpenses\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\u00a0x<br \/>\nSelling &amp; distribution\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\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n\tCarriage outward\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\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\n\tCommission sales\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nSalesmen salaries\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<br \/>\nAdministration exp\u00a0\u00a0\u00a0\u00a0<br \/>\nAdmin salaries\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nOffice rent\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nOffice insurance\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nOffice lighting\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<br \/>\nDepreciation of<br \/>\nOffice machinery \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x\u00a0\u00a0\u00a0\u00a0x<\/p>\n<p>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0X<br \/>\nNet profit c\/d\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<br \/>\n<img decoding=\"async\" align=\"left\" src=\"https:\/\/ecolebooks.com\/nigeria\/wp-content\/uploads\/9jalessonsimages\/100423_1159_Week3and42.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\u00a0X\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0x<\/p>\n<p>\u00a0<br \/>\n\u00a0<strong>TRANSFER PRICING<br \/>\n<\/strong>In the trading account, the cost of production is charged to determine profit on sales. The changing of cost of production of goods may be done in two ways.<\/p>\n<ol>\n<li>Actual factory cost\n<\/li>\n<li>Current market values\n<\/li>\n<\/ol>\n<p>\u00a0When goods manufactured are charged at the current market value to the trading account,  the main objective is obtain  profit on the manufacturing process. The manufacturing accounts will then have to show a balance which represents a profit or loss on production and this is transferred to profit and loss account. <\/p>\n<p>\u00a0<strong>EVALUATION<br \/>\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0State four classifications of costs revealed by manufacturing accounts.<br \/>\n2.\u00a0\u00a0\u00a0\u00a0State two reasons for the preparation of manufacturing accounts.<\/p>\n<p>\u00a0<br \/>\n\u00a0<br \/>\n\u00a0<br \/>\n\u00a0<br \/>\n\u00a0<br \/>\n\u00a0<br \/>\n\u00a0<br \/>\n\u00a0<strong>PRACTICAL ILLUSTRATIONS<br \/>\n<\/strong>The following information was extracted from the books of Tasty Enterprises for the year ended 31<sup>st<\/sup> December 1991<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\u00a0\u00a0\u00a0\u00a0\u00a0N<br \/>\nManufactured goods\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a09,740<br \/>\nRaw materials\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a03,000<br \/>\nDiscount allowed\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a03,740<br \/>\nDepreciation on plant and machinery\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0           13,000<br \/>\nPrinting and stationery\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0   930<br \/>\nPurchases: Manufactured goods\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0          12,740<br \/>\n\u00a0\u00a0\u00a0\u00a0        Carriage inwards\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0   500\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<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          21,740<br \/>\nCash at bank\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,710<br \/>\nPurchases of raw material\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a087,260<br \/>\nOffice rent and rates\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a06,500<br \/>\nRepairs to machinery\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02,500<br \/>\nPlant and machinery\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0          75,200<br \/>\nFactory electricity\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a05,790<br \/>\nCarriage inwards (raw materials)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a03,410<br \/>\nOffice salaries\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a09,400<br \/>\nCarriage outwards\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02,330<br \/>\nFactory rent and rates\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0          22,710<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   570<br \/>\nManufacturing wages\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0        110,290<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        299,420<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          77,820<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          21,790<br \/>\n<strong><em>Additional \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<\/em><\/strong>(a) Stock on 31<sup>st<\/sup> Dec 1991<br \/>\n\u00a0\u00a0\u00a0\u00a0Manufactured goods N27,940<br \/>\n\u00a0\u00a0\u00a0\u00a0Raw material\u00a0\u00a0\u00a0\u00a0N 2,000<br \/>\n(b) Goods manufactured to be posted to the sales department at net \u00a0\u00a0\u00a0\u00a0realizable value of N271,500<\/p>\n<p>\u00a0You are required to prepare manufacturing trading profit and loss account for year ended 31<sup>st<\/sup> Dec. 1991.<br \/>\n<strong>SOLUTION:\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 TASTY ENTERPRISES<br \/>\n<\/strong><strong>Manufacturing Trading Profit and Loss Account for the year ended 31<sup>st<\/sup> December, 1991.<br \/>\n<\/strong><br \/>\n\u00a0<strong>Dr\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0N\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0N\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0N\u00a0\u00a0\u00a0\u00a0N<br \/>\n<\/strong>Opening stock of r.m\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a03,000\u00a0\u00a0\u00a0\u00a0      Transfer cost       271,500<br \/>\n\tAdd. Purchases of r.m\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a087,260<br \/>\nCarriage of raw mat.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0  3,410\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a090,670<br \/>\n\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a093,670<br \/>\nLess closing stock of r.m\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02,000<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\u00a091,670<br \/>\nManufacturing wages\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0          \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0110,290<br \/>\nPrime cost\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0     \u00a0\u00a0\u00a0\u00a0       \u00a0\u00a0\u00a0\u00a0201,960<br \/>\nFactory overheads<br \/>\nDepreciation p&amp;m\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a013,000<br \/>\nRepair to machinery\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0  \u00a0\u00a0\u00a0\u00a02,500<br \/>\nElectricity\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0  5,790<br \/>\nFactory rent and rates\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a022,710\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a044,000<br \/>\n\tProduction cost\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0       \u00a0\u00a0\u00a0\u00a0245,960<br \/>\nGross profit on production\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a025,540<br \/>\n\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0       \u00a0\u00a0\u00a0\u00a0<strong>271,500\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0271,500<br \/>\n\t\t<\/strong>Opening stock of finished gds\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a09,740Sales \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0299,470<br \/>\nAdd: Transfer cost 271,500<br \/>\nPurchases of finished gds\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a012,740<br \/>\nCarriage inwards\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0     500<br \/>\n\t\t284,740<br \/>\nCost of goods available \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0          294,480<br \/>\nfor sales  <\/p>\n<p>\u00a0<strong>TASTY ENTERPRISES<br \/>\n<\/strong>Manufacturing Trading Profit and Loss Account for the year ended 31<sup>st<\/sup> December, 1991.<\/p>\n<p>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0N\u00a0\u00a0\u00a0\u00a0N\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0N\u00a0\u00a0\u00a0\u00a0 N<br \/>\nCost of goods available \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0294,480 Sales b\/f\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0299,420<br \/>\n\tfor sale b\/f<br \/>\nLess closing stock\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0  27,940<br \/>\nCost of goods sold\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0266,540<br \/>\nGross profit c\/d\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0  32,880<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\u00a0299,420\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0299,420<br \/>\nExpenses\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\u00a032,880<br \/>\nDiscount allowed\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0  3,740\u00a0\u00a0\u00a0\u00a0Profit on manufacture\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a025,540<br \/>\n\tOffice rent &amp; rates\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0  6,500<br \/>\nOffice salaries\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0  9,400<br \/>\nCarriage outward\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0  2,330<br \/>\nPrinting &amp; stationary\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0     930<br \/>\nNet profit\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a035,520<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\u00a058,420\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a058,420<\/p>\n<p>\u00a0<strong>EVALUATION<br \/>\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0What is factory overhead?\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<br \/>\n2.\u00a0\u00a0\u00a0\u00a0What is prime cost?<br \/>\n3.\u00a0\u00a0\u00a0\u00a0Define cost of production by way of formula<\/p>\n<p>\u00a0<strong>GENERAL EVALUATION QUESTIONS<br \/>\n<\/strong><\/p>\n<ol>\n<li>Explain three differences between a trial balance and a balance sheet\n<\/li>\n<li>State four reasons for disagreement between a bank statement balance and cash book balance\n<\/li>\n<li>List five methods of providing for depreciation\n<\/li>\n<li>State five reasons for making provision for depreciation\n<\/li>\n<li>List six factors to be considered in computing the depreciation on fixed assets\n<\/li>\n<\/ol>\n<p>\u00a0<strong>READING ASSIGMENT<br \/>\n<\/strong>Essential Financial Accounting for S.S. by O.A. Longe page 160-171<\/p>\n<p>\u00a0<strong>WEEKEND ASSIGNMENT<br \/>\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0The following is the main objective of a manufacturing account (a) to \u00a0\u00a0\u00a0\u00a0ascertain gross profit (b) to ascertain net profit (c) to ascertain profit on \u00a0\u00a0\u00a0\u00a0asset (d) to ascertain cost of production<br \/>\n2.\u00a0\u00a0\u00a0\u00a0The cost components of manufacturing directly related in the per unit of \u00a0\u00a0\u00a0\u00a0good produced is called (a) factory cost (b) cost of production (c) prime \u00a0\u00a0\u00a0\u00a0cost (d) fixed cost.<br \/>\n3.\u00a0\u00a0\u00a0\u00a0Cost of production is also called (a) factory overhead (b) factory \u00a0\u00a0\u00a0\u00a0expenses (c) manufacturing cost (d) prime cost<br \/>\n4.\u00a0\u00a0\u00a0\u00a0Prime cost can also be described as (a) indirect cost (b) direct cost<br \/>\n\u00a0\u00a0\u00a0\u00a0(c) fixed cost (d) variable cost<br \/>\n5.\u00a0\u00a0\u00a0\u00a0Royalties is an example of ________ cost (a) factory cost (b)  indirect \u00a0\u00a0\u00a0\u00a0cost (c) prime cost (d) selling and distribution <\/p>\n<p>\u00a0<strong>THEORY<br \/>\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Write short note on: \u00a0\u00a0\u00a0\u00a0<br \/>\na.  Prime cost\u00a0\u00a0\u00a0\u00a0<br \/>\nb.  Factory overhead<br \/>\n2.\u00a0\u00a0\u00a0\u00a0Distinguish between<br \/>\na.\u00a0\u00a0\u00a0\u00a0Work in progress (W.I.P) and finished goods<br \/>\nb.\u00a0\u00a0\u00a0\u00a0Prime cost and factory overhead.<\/p>\n<p>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u00a0WEEK THREE AND FOUR \u00a0\u00a0\u00a0\u00a0DATE: _______________ TOPIC: MANUFACTURING ACCOUNTS CONTENT Meaning of Manufacturing Accounts Purpose&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,252],"tags":[],"class_list":["post-3143","post","type-post","status-publish","format-standard","hentry","category-posts","category-second-term-ss2-financial-accounting"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/3143","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=3143"}],"version-history":[{"count":1,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/3143\/revisions"}],"predecessor-version":[{"id":3144,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/3143\/revisions\/3144"}],"wp:attachment":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/media?parent=3143"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/categories?post=3143"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/tags?post=3143"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}