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Questions and Answers
What is the total amount for the Works Cost of Production in the Manufacturing Account?
What is the Closing Stock value recorded in the Trading Account?
Which expense is not included in the Profit and Loss Account?
How much is the total machinery value after depreciation in the Balance Sheet?
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What is the total amount of capital after accounting for drawings in the Balance Sheet?
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Which of the following is listed as an expense in the Profit and Loss Account?
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What is the amount of Depreciation for Machinery listed in the Profit and Loss Account?
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What is the total amount of Rent expenses recorded in the Profit and Loss Account?
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Study Notes
Manufacturing Account
- The opening stock of raw materials was ₹6,000.
- Purchases of raw materials amounted to ₹7,24,000.
- The closing stock of raw materials was ₹7,33,000.
- Expenses incurred in the manufacturing process include:
- Rent: ₹900
- Carriage inward: ₹1,500
- Fire insurance: ₹420
- Manufacturing wages: ₹12,000
- Factory power and fuel: ₹600
- The opening work-in-progress (WIP) was ₹14,000.
- The closing WIP was ₹11,000.
- The net works cost of production was ₹1,57,420, which is added to the cost of raw materials to determine the total cost of goods manufactured.
- The total cost of goods manufactured was ₹752,420.
Trading Account
- The opening stock of finished goods was ₹7,000.
- The net works cost of production from the manufacturing account (₹1,57,420) is transferred to the trading account.
- Purchases of finished products were ₹104,030
- The total cost of goods available for sale was ₹2,62,450
- Sales revenue was ₹2,52,450
- The closing stock of finished goods was ₹10,000
Profit and Loss Account
- Expenses recorded in the P&L account include:
- Interest on capital: ₹ 4,000
- Depreciation on motorcar: ₹ 1,200
- Depreciation on machinery: ₹ 4,500
- Depreciation on furniture: ₹ 450
- Bad debts written off: ₹ 800
- Debtors' bad debts recovered: ₹ 3,700
- Bills discounted recovered (BDR): ₹ 120
- Carriage outward: ₹ 900
- Discount allowed: ₹ 210
- Printing and stationery: ₹ 360
- Miscellaneous expenses: ₹ 1,680
- Advertisement: ₹ 9,000
- Salaries: ₹ 10,400
- Rent: ₹ 1,800
- The net profit for the period was ₹65,510.
- Other income included:
- Rent receivable: ₹ 600
- Interest accrued on a fixed deposit (FD): ₹ 160
Balance Sheet
- The capital balance was ₹45,000, increasing by ₹4,000 (interest on capital) to a total of ₹49,000.
- Drawings of ₹3,600 reduced the capital balance to ₹45,400.
- Sundry creditors amounted to ₹7,10,910.
- Fixed assets included:
- Motorcar: ₹ 10,800 (after deducting depreciation)
- Machinery: ₹ 40,500 ( after deducting depreciation)
- Furniture: ₹ 4,500
- Investments included:
- A fixed deposit at the Bank of Baroda (BOB) amounting to ₹ 4,000.
- Current assets included:
- Rent receivable: ₹ 600
- Debtors: ₹ 33,300 ( after deducting bad debts and bills discounted recovered)
- Bank balance at BOB: ₹ 3,500 (after deducting the fixed deposit)
- Interest accrued: Not specified but it is used to calculate the closing balance.
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Description
Test your knowledge on manufacturing and trading accounts with this quiz. You will encounter questions related to raw materials, expenses, cost of goods manufactured, and sales revenue. Brush up on your accounting skills as you explore these essential financial concepts.
