IGCSE Accounting Paper-1: Specimen Questions with Answers 334 - 337 of 338
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Passage
Gulzar opened a toy car factory on 1 May 2019. He provided the following information at the end of his first accounting year.
| $ | ||
| Purchases of raw materials | 14000 | |
| Direct factory wages | 9800 | |
| Indirect factory wages | 7500 | |
| Factory insurance | 300 | |
| General factory expenses | 200 | |
| Carriage inwards | 650 | |
| Factory Electricity | 900 | |
| Stock at 30 April 2020: | ||
| Raw materials | 1000 | |
| Work in progress | 1550 | |
| Finished goods | 2850 |
Factory machinery, $ 20000, was purchased on 1 May 2019 and is to be depreciated by 10 % per annum.
Question 334 (4 of 8 Based on Passage)
Explanation
Question 335 (5 of 8 Based on Passage)
Write in Brief
One Liner▾Define and give one example of each of the following types of inventory. (Marks 2)
Work in progress
Explanation
Work in progress is a semi-finished good. It is good in intermediate stage between raw material and finished goods. It needs some further processing to become finished goods.
In the manufacturing plastic toy car, moulded toy parts (unassembled) are Work in Progress.
Question 336 (6 of 8 Based on Passage)
Write in Brief
One Liner▾Define and give one example of each of the following types of inventory. (Marks 2)
Finished goods
Explanation
Finished Goods are those which have completed the manufacturing process and are ready to be sold to the consumer.
In plastic toy car manufacturing, finished toy cars are finished goods.
Question 337 (7 of 8 Based on Passage)
Write in Short
Short Answer▾Prepare the manufacturing account for the year ended 30 April 2020. (Marks 10)
Gulzar
Manufacturing Account for the year ended 30 April 2020
| $ | $ |
Explanation
Gulzar
Manufacturing Account for the year ended 30 April 2020
| $ | $ | |
| Cost of materials used- | ||
| Purchases of materials | 14000 | |
| Carriage Inwards | 650 | 14650 |
| Less: Closing stock of raw materials | 1000 | |
| 13650 | ||
| Direct Factory Wages | 9800 | |
| Prime Cost | 23450 | |
| Factory Overheads- | ||
| Indirect Factory Wages | 7500 | |
| General Factory Expenses | 200 | |
| Factory Electricity | 900 | |
| Factory Insurance | 300 | |
| Depreciation on Factory Machinery | 2000 | 10900 |
| 34350 | ||
| Less: Closing Work in Progress | 1550 | |
| Cost of Production | 32800 |
Depreciation on Factory Machinery =
The cost of production was much higher than Gulzar expected.