On December 31, 1987, the following balances appeared in the books of Ravi:
| Balance on January 1, 1987 | Rs. |
| Raw Materials | 12,400 |
| Work-in-progress | 10,600 |
| Finished Goods | 24,000 |
| Purchases of Raw Materials | 86,000 |
| Freight Inwards | 3,500 |
| Manufacturing Wages | 36,000 |
| Import Duty | 6,000 |
| Dock Dues | 1,200 |
| Motive Power | 5,000 |
| Oil, Grease, etc. | 300 |
| Factory Insurance | 500 |
| Factory Rent | 12,000 |
| Repairs to Plant and Machinery | 600 |
| Depreciation on Plant and Machinery | 3,000 |
| Sales of Finished Goods | 2,15,000 |
| Sale of Scrap | 2,800 |
| Balance on December 31, 1987 | |
| Raw Materials | 10,800 |
| Work-in-Progress | 9,200 |
| Finished Goods | 32,000 |
Prepare the Manufacturing Account and the Trading Accounting for the year ended December 31, 1987.
To prepare the Manufacturing Account and Trading Account for the year ended December 31, 1987, we need to follow the accounting principles for the preparation of these accounts.
### Manufacturing Account for the year ended December 31, 1987
The Manufacturing Account provides a detailed statement of the cost of goods manufactured during the year. It includes raw materials, direct wages, direct expenses, and the cost of work in progress.
The formula for the Manufacturing Account is as follows:
\[
\text{Cost of Goods Manufactured} = \text{Opening Work-in-Progress} + \text{Raw Materials Consumed} + \text{Manufacturing Expenses} + \text{Direct Wages} - \text{Closing Work-in-Progress}
\]
First, we need to calculate some necessary values:
1. Opening Raw Materials = Rs. 12,400
2. Purchases of Raw Materials = Rs. 86,000
3. Freight Inwards = Rs. 3,500
4. Import Duty = Rs. 6,000
5. Closing Raw Materials = Rs. 10,800
The raw materials consumed during the year will be calculated as:
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