IGCSE Accounting Paper-1: Specimen Questions with Answers 334 - 335 of 338

Passage

Gulzar opened a toy car factory on 1 May 2019. He provided the following information at the end of his first accounting year.

Gulzar opened a toy car factory on 1 May 2019Gulzar opened a toy car factory on 1 May 2019
$
Purchases of raw materials14000
Direct factory wages9800
Indirect factory wages7500
Factory insurance300
General factory expenses200
Carriage inwards650
Factory Electricity900
Stock at 30 April 2020:
Raw materials1000
Work in progress1550
Finished goods2850

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)

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Write in Brief

One Liner▾

Define and give one example of each of the following types of inventory. (Marks 2)

(I) Raw materials

Explanation

Raw Materials are inputs which are used to manufacture other things by further processing them. These form part of finished goods

In the manufacturing plastic toy car, plastic granules is a raw material.

Question 335 (5 of 8 Based on Passage)

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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

Manufacturing Account for the year ended 30 April 2020Manufacturing Account for the year ended 30 April 2020
$$

Explanation

Gulzar

Manufacturing Account for the year ended 30 April 2020

Manufacturing Account for the year ended 30 April 2020Manufacturing Account for the year ended 30 April 2020
$$
Cost of materials used-
Purchases of materials14000
Carriage Inwards65014650
Less: Closing stock of raw materials1000
13650
Direct Factory Wages9800
Prime Cost23450
Factory Overheads-
Indirect Factory Wages7500
General Factory Expenses200
Factory Electricity900
Factory Insurance300
Depreciation on Factory Machinery200010900
34350
Less: Closing Work in Progress1550
Cost of Production32800

Depreciation on Factory Machinery =

The cost of production was much higher than Gulzar expected.

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