Name of Account RM WIP - Raw materials, 1 January 2020 WIP - Factory wages, 1 January 2020 WIP - Factory overhead, 1 January 2020 Raw materials, 1 January 2020 Raw materials purchases Transportation of raw materials 14,630 18,330 21,660 36,700 251,340 8,340 9,600 3,500 285,430 Custom duties on raw materials Insurance on raw materials Factory wages Group accident insurance on factory workers Depreciation of plant and factory machinery Oils and lubricants 12,340 Factory supervisor's wages Factory cleaner's wages Factory security's staff salaries Factory repairs and maintenance Factory insurance expense 48,000 5,700 30,400 12,300 18,600 9,560 8,400 23,000 75,380 37,630 35,480 Sales returns Finished goods, 1 January 2020 Advertising expense Salesmen's commissions Salesmen's salaries Selling expenses Office wages & salaries Office insurance expense Depreciation of office furniture Discounts allowed Bad debts expense Rent expenses Manager's salary Utilities Depreciation of motor vehicles General expenses Pilferage of raw materials Returns of raw materials Sales Discount received Interest on fixed deposits 64,570 11,220 73,580 5,870 3,500 22,460 32,760 180,000 99,000 40,800 44,000 22,500 1,400 5,600 2,854,200 23,460 15,000
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Required:
i) prepare statement cost of production for the year ended 31 december 2020.
ii) prepare statement of comprehensive income for the year ended 31 december 2020.
![Additional information:
[Maklumat tambahan:]
On 31 December 2020, the following estimates were made:
[Pada 31 Disember 2020, anggaran-anggaran berikut telah dibuat:]
(i)
Rent – two-thirds of the rent is for the factory while the rest is for the office.
[Sewa - dua pertiga daripada sewa adalah untuk kilang sementara selebihnya untuk pejabat.]
(ii) Manager's salary – one-third is for the factory while the rest is for the office.
[Gaji pengurus - satu pertiga adalah untuk kilang sementara selebihnya untuk pejabat.]
(iii) Utilities – RM4,800 of the utilities is estimated to be for the office use.
[Utiliti - RM4,800 utiliti dianggarkan untuk kegunaan pejabat.]
(iv) Depreciation of motor vehicles – RM36,000 of this considered to be for use by the factor
and the rest for the office.
[Susut nilai kenderaan bermotor - RM36,000 ini dianggap digunakan oleh faktor tersebut dan selebihnya
untuk pejabat.]
(v) General expense – one-third of the amount is considered to be for office use while the
rest is for use in the factory.
[Perbelanjaan umum – satu pertiga daripada jumlah tersebut dianggap untuk kegunaan pejabat
sementara selebihnya digunakan untuk kilang.]
(vi) Inventory of raw materials – RM15,420.
[Inventori bahan mentah - RM15,420.]
(vii) WIP, raw materials – RM13,690.
(WIP, bahan mentah - RM13,690.]
(viii) WIP, factory wages – RM16,320.
(WIP, upah kilang - RM16,320.]
(ix) WIP, factory overhead – RM28,850.
(WIP, overhed kilang - RM28,850.]
(x) Inventory of finished goods was valued at RM95,000.
[Inventori barang siap dinilai pada RM95,000.]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F67e947fe-63ad-4e33-b448-1085fcecd38e%2F11dc72f8-3bea-4a20-b246-7eef1c390129%2F5d9uv8_processed.png&w=3840&q=75)
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