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Maxwel and Ken are partners trading as Makena Brick Manufacturers. The following balances were extracted from the books of Makena Brick manufacturers as at 31...

      

Maxwel and Ken are partners trading as Makena Brick Manufacturers. The following balances were extracted from the books of Makena Brick manufacturers as at 31 July 2009.
Sh. "000"
Plant and Machinery at cost (1 August 2008) 72,000
Loose tools at cost (1 August 2008) 21,000
Sales 182,000
Raw materials purchased 55,000
Motor vehicles at cost (1 August 2008) 42,000
Direct factory wages 51,000
Electricity 17,000
Indirect factory wages 20,000
Machinery repairs 13,600
Motor vehicle expenses 24,000
Rent and insurance 23,600
Administrative staff salaries 43,000
Administrative expenses 21,000
sales and distribution staff salaries 25,000
Capital (1 August 2008)
Maxwell 150,000
Ken 140,000
Accounts receivables 28,500
Accounts payables 23,200
Balance at bank 20,500
Drawings
Maxwell 10,000
Ken 8,000

Additional information
1. The estimated useful life of plant and machinery is 10 years while that of motor vehicles is 4 years. The company uses the straight-line method to provide for depreciation on property, plant and equipment
2. Inventories as at 31 July 2009 were as follows
Sh.
Raw materials 19,000,000
Finished goods 10,000,000
Work-in-progress 24,300,000
3. As at 31 July 2009, accrued electricity amounted to sh. 13,000,000 while prepaid rent and insurance amounted to sh. 9,800,000
4. The following expenses are to be apportioned between the factory and the administration in the ratios indicated below
Factory Administration
Electricity 2/3 1/3
Rent and insurance ¾ ¼
Motor vehicle running expenses ½ ½
Depreciation on motor vehicles ½ ½
5. Loose tools as at 31 July 2009 were valued at sh. 17,000,000
6. Goods were transferred from the factory to the warehouse at sh. 107,000,000
7. Provision for doubtful debts is to be made at 5% of the accounts receivable
8. The partners share profits and losses equally

Required:
(i) Manufacturing and income statement for the year ended 31 July 2009
(ii) Statement of financial position as at 31 July 2009

  

Answers


Francis
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francis1897 answered the question on October 4, 2022 at 05:33


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