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Items to be Credited

  • By - product: It refers to a product which is produced from the same raw materials, which are used for producing the main product and without incurring any additional expenses from the same production process in which the main product is produced.
     

    Example: Molasses is a by - product in sugar manufacturing.

  • By - products generally have insignificant value as compared to the main product. They are generally valued at Net Realisable Value (NRV), and this would be credited to Manufacturing Account.
  • Closing work-in-progress: It refers to the closing stock of unfinished goods. It will be credited to Manufacturing Account.

Format of Manufacturing Account



Illustration 10

 

Mr.Vimal runs a factory which produces toilet soaps.

 

Following details were available inrespect of his manufacturing activities for the year ended on 31.3.2014:



 

You are required topreparea Manufacturing Accountof Mr. Vimalfor they earended 31.3.2014.
 

Solution

 


 

Working Notes:

 

 

Illustration 11

 

Mr. Ram runs a factory which produces motor spares of export quality.

 

The following details were obtained about his manufacturing expenses for the year ended on 31.3.2014.
 


 

You are required to prepare Manufacturing Account of Mr. Ram for the ear ended on 31.3.2014.

 


 

Illustration 12

Mr. X gives you the following Trial Balance and other related information:
 

Trial Balance as on 31st March, 2014

 

Particulars

Debit (₹)

Credit (₹)

Capital

 

3,25,000

Sales

 

4,85,000

Purchases

2,15,000

 

Opening Stock

55,000

 

Freight Inward

20,000

 

Salaries

1,05,000

 

Other administration expenses

75,000

 

Furniture

1,75,000

 

Debtors and Creditors

1,05,000

95,000

Returns

10,000

6,000

Discounts

9,500

4,500

Bad Debts

2,500

 

Investments in Government securities

50,000

 

Cash in hand and Cash at bank

93,500

 

 

9,15,500

9,15,500


Other Information:

  • Closing stock was ₹ 90,000
  • Depreciate furniture @ 10% p.a.

You are required to prepare Trading and Profit and Loss Account for the year ended on 31-03-2014 and Balance Sheet of Mr. X as on that date.


Solution:

 


 





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