Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Accounting for Manufacturing Entities, Please help!!
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- April 3, 2018 at 8:20 pm #444819AnonymousInactive
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Mr Mekondjo, the owner of Widget Distributors, has in the past imported widgets. However, from 1 January 20×8, he decided to manufacture the widgets himself.
Here is the abridged statement of financial position of Widget Distributors at 31 December 20×7:
Capital – Mekondjo 2 000 Accounts receivable 700
Inventory (1 000 units) 800 Accounts payable 1 000
Bank 1 500From a scrutiny of vouchers and other documents you find that these transaction
have taken place during the year ended 31 December 20×8:
1. Cash transaction as per the cash book:Receipts:
Capital introduced by Mr Mekondjo R10 000
Accounts receivable R6 000
Cash sales R2 000Payments:
Accounts payable R7 000
Drawings- Mr. Mekondjo R2 500
Wages paid to manufacturing staff R3 000
Rent for factory R1 200
Hire of specialised machinery R1 3002. Amount owing, totalling R3 500 were written off as bad debts.
3. 5 500 units were sold.
4. A royalty of 10 cents per completed unit manufactured during the year is payable in arears on 1 January of the following year.
5. In addition, the following balance at 31 December 20×8 were determined:
*Accounts payable – raw material R3 500
*Accounts receivable – trade debtors R1 200
*Inventory: Finished goods (4 500 units) R?
*Work – in – progress (2 000 units) R?
* Raw material R2 5006. Inventory is valued at factory cost using the first – in first – out basis. 7. Work – in – progress at 31 December 20×8 was 75% complete in respect of raw material, and 45% complete in respect of direct labour and overheads.
You are required to:
1) Prepare the statement of the cost of goods manufactured for Widget distributors for the year ended 31 December 20×8.2) Calculate the gross profit of Widget Distributors for the year ended 31 December 20×8.
April 4, 2018 at 6:39 am #444892There is no point in typing out a full question like this and expecting me to produce a full answer.
Unless it was set you as a test question, you must have an answer in the same book in which you found the question, and so you should ask about whatever it is in the answer that you are not clear about.
If it was set you as a test question, then do not expect us to do your homework for you 🙂
This question could not possibly be asked in Paper F3. Our free lectures are a complete course for Paper F3 and cover everything needed to be able to pass the exam well.
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