By S. Hall and N. Skene Smith (Auth.)
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We can then add an extra stage to the Profit Calculation. In the Manufacturing Account, we present: 1. The Cost of Materials Consumed, 2. All Factory Wages and Factory Expenses; Added together, these give us, 3. The Factory Cost of Goods Produced. But there is a complication. e. the "cost" value of the commencing Work in Progress. Just as this figure must be included in the "Factory Costs of Goods Produced," so we must exclude the "cost" value of the Work in Progress at the end of the accounting period.
1962 Wages—Factory 4,140 Gross Profit carried down 6,857 Cr. £ 16,108 2,612 £18,720 £18,720 47 FINAL ACCOUNTS Rates Salaries and Wages Carriage Outwards Lighting and Heating Telephone Insurance Discounts Bad Debts General Expenses Loan Interest Depreciation: Buildings Machinery Net Profit £ 260 1,219 601 80 60 135 1,016 104 119 250 £ By Gross Profit brought down Gain on Sale of Machine 6,857 62 102 462 2,511 £6,919 £6,919 Balance Sheet as at 31st December, 1962 Capital: Balance at 1st Jan. Add Net Profit Less Drawings Assets: Buildings Balance at 1st Jan.
To cover private use of the car he treats half of the expenses as private and transfers this proportion to his personal Drawings Account. On 1st January, 1962, he owed £16 for Repairs and had paid Insurance in advance £12. During 1962 he drew cheques to the value of £193 and on 31st December, 1962, he owed £13 for Repairs and had paid Insurance in advance £14. Show the account for Motor Expenses in Currants ledger for 1962 after the accounts for the year had been closed. 13. From the following list of balances and additional information prepare Manufacturing, Trading and Profit & Loss Accounts for the year ended 31st December, 1962, and a Balance Sheet as at that date: Dr, Cr.