Wang Yee is a manufacturer. The following balances were extracted from his books on 31 January 2010. | | $ | |---|---| | Inventories (stocks) 1 February 2009 | | Raw materials | 14700 | | Work in progress | 23570 | | Finished goods | 35000 | | Purchases of raw materials | 75600 | | Purchases of finished goods | 15500 | | Direct factory wages | 62140 | | Rent | 28000 | | Factory management salaries | 31500 | | Office salaries | 41600 | | Revenue (sales) | 342500 | | Revenue (sales returns) | 1250 | | Distribution costs | 28650 | | Sundry office expenses | 9870 | | Non-current liability (8% loan – repayable 31 December 2015) | 40000 | | Finance costs (loan interest) paid | 2400 | | Property (land and buildings) (cost) | 80000 | | Plant and machinery (cost) | 90000 | | Office equipment (cost) | 30000 | | Provision for depreciation of plant and machinery | 32000 | | Provision for depreciation of office equipment | 12000 | | Provision for doubtful debts | 1550 | | Trade receivables (debtors) | 45000 | | Trade payables (creditors) | 60700 | | Cash (bank) | 33030 Cr | | Capital | 110000 | | Drawings | 17000 | Additional information: 1 Inventories (stocks) at 31 January 2010 were valued as follows: Raw materials $16250 Work in progress $18780 Finished goods $32500 2 At 31 January 2010 Direct factory wages, $1120, were accrued. Sundry office expenses, $630, were prepaid. 3 Rent is to be apportioned on the basis of area occupied. Three fifths (3/5) of the area is occupied by the factory and two fifths (2/5) by the offices. 4 Depreciation is charged on plant and machinery at 20% per annum using the diminishing (reducing) balance method. 5 Office equipment is depreciated using the straight-line method at 20% on cost. Office equipment, $24000, was purchased on 31 July 2006. Additional office equipment, $6000, was purchased on 30 September 2009. No other changes in non-current (fixed) assets occurred in the year ended 31 January 2010. Depreciation is calculated for the time assets are held in the business. 6 The provision for doubtful debts is to be maintained at 4% of trade receivables (debtors). REQUIRED

1. (a)Prepare the manufacturing account of Wang Yee for the year ended 31 January 2010. Show clearly the cost of raw materials consumed, prime cost and cost of production.[11]
2. (b)Prepare the income statement (trading and profit and loss accounts) of Wang Yee for the year ended 31 January 2010.[15]
3. (c)Prepare the balance sheet of Wang Yee at 31 January 2010.[14]