MOUNT KENYA UNIVERSITY

IDRIS ABDI BILAL

BDS/2014/79336
BAF1201 CAT ONE
B kinuthia spikes
Trial Balance

as on 31 December 2014
Dr

Stock of raw materials 1.1.2013

Stock of finished goods 1.1.2013
Work in progress 1.1.2013
Wages(direct 180,000: factory
indirect145,000)
Royalties
Carriage inwards (on raw materials)
Purchases of raw materials
Productive machinery (cost Kshs. 280,000)
Accounting machinery (cost Kshs. 20,000)
General factory expenses
Lighting
Factory power
Administrative salaries
Sales representatives salaries
Commission on sales
Rent
Insurance
General administration expenses
Bank charges
Discounts allowed
Carriage outwards
Sales
Debtors and creditors
142,300
Bank
Cash
Drawings
Capital as at 1.1.2013
Notes at 31.12.2013

Cr

21,000
38,900
13,500
325,000
7,000
3,500
370,000
230,000
12,000
31,000
7,500
13,700
44,000
30,000
11,500
12,000
4,200
13,400
2,300
4,800
5,900
1000,000

125,000

56,800
1,500
20,000
29,680

1. Stock of raw materials Kshs. 24,000, stock of finished goods Kshs. 40,000, work in progress
Kshs. 15,000.
2. Lighting, and rent and insurance are to be apportioned: factory 5/6ths, administration 1/6th.
3. Depreciation on productive and accounting machinery at 10 per cent per annum on cost.
Required:
Prepare a manufacturing, Trading Profit and Loss Account for the year ended 31 December 2014

ANSWER

B KINUTHIA SPIKES
Manufacturing, Trading Profit and Loss Account for the year ended 31 December
2014
Particulars
Ksh.
Ksh.
Raw Materials
Opening Stock
21,000
Purchases
370,000
Add: Carriage Inwards
3,500
373,500
394,500
Less: Raw Materials closing stock
(24,000)
Cost of Raw Materials used
370,500
Direct wages
180,000
Prime Cost
550,500
Factory Expenses
Lighting (w1)
6,250
Rent (w2)
10,000
Insurance (w3)
3,500
Wages
145,000
Royalties
7,000
Depreciation: productive machinery
28,000
Factory expenses (General)
31,000
power
13,700
244,450
Total cost of production
794,950
Add: opening WIP
13,500
808,450
Less: closing WIP
(15,000)
Factory cost production per finished goods
793,450
Sales
Less cost of sales
Opening stock of finished goods
Factory cost of production
Less closing stock of finished goods
Gross profit
Expenses
Accounting machinery depreciation
Lighting (w1)
Administrative salaries
Sales rep salaries
Sales commission
Rent (w2)
Insurance (w3)
General administrative expenses
Bank charges

1,000,000
38,900
793,450
832,350
(40,000)
2,000
1,250
44,000
30,000
11,500
2,000
700
13,400
2,300

792,350
207,650

Carriage outwards
Discounts allowed
Net profit
Working 1 (w1) Lighting
Factory

5/6 * 7500 = 6,250

Expenses 1/6 * 7500 = 1,750

Working 1 (w2) Rent
Factory

5/6 * 12000 = 10,000

Expenses 1/6 * 12000 = 2,000

Working 1 (w3) Insurance
Factory

5/6 * 4,200 = 3,500

Expenses 1/6 * 4,200 = 700

5,900
4,800

(117,850)
89,800