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Higher Accounts > Manufacturing -> Balance Sheet > Flashcards

Manufacturing -> Balance Sheet Flashcards

1
Q

What is the equivalent of “Finished Goods” for a Manufacturing Account ?

A

Raw Materials

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2
Q

What are the 3 types of Inventory given in the Trial Balance for a full Manufacturing account to Balance Sheet question ?

A

Raw Materials
Work-In-Progress
Finished Goods

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3
Q

What do you do with “Opening Work-In-Progress”

A

Add to Working Capital

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4
Q

What do you do with “Closing Work-In-Progress”

A

Subtract from Working Capital

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5
Q

What is the first thing that goes in a Manufacturing Account ?

A

Opening Inventory of Raw Materials

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6
Q

What do you do with Carriage In on Finished goods / Raw Materials

A

Add

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7
Q

What do you do with Carriage Out on finished goods / Raw Materials ?

A

Subtract

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8
Q

What do you do with Purchase returns in a Manufacturing Account

A

Subtract from (Opening Inv + Purchases)

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9
Q

What do you do with Purchase returns in an Income Statement ?

A

(Subtract from purchases) + Opening Inv

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10
Q

Where to “Direct Wages” go in a Manufacturing Account ?

A

Raw Materials:

after “Cost of Raw Materials consumed”

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11
Q

Where do “Indirect Wages” go in a Manufacturing Account ?

A

Factory Overheads:

(after Prime Cost)

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12
Q

Where does “Manufacturing Profit” get taken to ?

A

Add: Income

Income Statement

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13
Q

Where does “Manufacturing Loss” get taken to ?

A

Less : Expenses

Income Statement

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14
Q

Where does “Market Value” get taken to ?

A

Cost of sales

Before Gross Profit in income statement

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15
Q

How do you find “Manufacturing Profit / Loss”

A

Factory Cost of Production - Market Value

If positive, (if Market Value FCOP) = Loss

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16
Q

What goes to “Factory Overheads”

A

Anything in the Trial Balance directly relating to the Factory

I.e. Factory Insurance
Factory Rent & Rates
Indirect Wages

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17
Q

What would you do if a note said;

“Wages are to to be split 3:1 between Factory and Office” ?

A

(3 + 1) = 4

3/4 x “Wages” = Factory (Factory Overheads, Manufacturing account)

1/4 x “Wages” = Office (Expenses, Income Statement)

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18
Q

What is the heading for a Manufacturing Account ?

A

“Manufacturing Account for the year ending ……. Year … “

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19
Q

Once calculated Factory Overheads do you add or subtract from Prime Cost ?

A

Add

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20
Q

Where does “Carriage in on RM” go ?

A

Manufacturing Account

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21
Q

Where does “Carriage in on FG” go ?

A

Income Statement

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22
Q

How do you calculate Gross Profit in an Income Statement ?

A

“Net Revenue” - “Cost of Sales”

Income statement

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23
Q

Where does “Warehouse wages / expenses” go ?

A

Cost of Sales

Income Statement

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24
Q

What happens is there is an “Increase in provision for bad debts” ?

A

The Total will go to Expenses (Income Statement!)
+
The INCREASE only gets deducted from debtors in Current Assets
(Balance Sheet!)

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25
Q

What Happens if there is a “Decrease in provision for bad debts” ?

A

The Total goes to Income

The Decrease only gets deducted from debtors in Current Assets
Balance Sheet!

26
Q

Where do “Dividends owing on quoted Investments” go ?

A

Add : Income (Income Statement!)

** Does Not affect Investments figure

27
Q

What do you do when there are “Wages accrued by £2,000” ?

A

Add £2,000 to the wages figure

28
Q

What do you do when there is “ Insurance prepaid by £3,000” ?

A

Subtract £3,000 from the Insurance figure

29
Q

Where do “Prepayments” go ?

A

Current Assets in Balance Sheet

30
Q

Where do “Accruals” go ?

A

Current Liabilities in Balance Sheet

31
Q

How do you depreciate “ 10% on Cost of Vehicles”

A

Expenses (income statement) Take 10% of Vehicles figure

Add calculated figure to any further depreciation and take to Non-Current Assets (Balance Sheet!)

32
Q

How do you depreciate “20% of net book value of Machinery” ?

A

Expenses (Income Statement) :20% x (“Machinery cost figure” - “provision for depreciations figure”) from Trial Balance

Then add calculated figure to current depreciation and take to Non-Current Assets (Balance Sheet!)

33
Q

What do you do with a “10% debentures” figure

A

Calculate Debenture Interest, 10% of value

Take calculated value to expenses and Current Liabilities

Take value of debentures I.e. (10% debentures @ £100) take £100 to Non-Current Liabilities

34
Q

What does the first section of a Manufacturing Account do down to ?

A

Prime Cost

35
Q

Where does GoodWill go ?

A

Intangible Assets:
Under Non-Current Assets

Balance Sheet

36
Q

Where does “GoodWill written off/down” go ?”

A

Appropriations, at the end of the income statement

Value of “GoodWill written down” is deducted from “GoodWill” and remainder is taken to Intangible assets (Balance Sheet)

37
Q

What happens if Property is Revalued ?

A

Cost remains the same however there is a “Negative Depreciation” I.e the Asset has Gained Value

Therefore there is a Negative Value for depreciation

38
Q

What do you do if “dividend is paid in full, but omitted from accounts”

A

Calculate Dividend, take to Appropriations and deduct from “Cash and Cash Equivalents” figure

39
Q

What do you do when there are “8% Preference Shares @ £100” ?

A

Calculate the Preference Dividend

(8 / 100) x £100 = £8 preference Dividend, take to Appropriations

40
Q

Where does “Unappropriated Profit” go ?

A

After profit for the year, Added after subtracting Tax

Financed by (Unappropriated profit c/f)

41
Q

What do you do with the balance at the end of the Income statement ? I.e “Unappropriated Profit Carried Forward”

A

Take to Financed By: at the end of the Balance Sheet

42
Q

Where does “Share Premium” go ?

A

Reserves under Financed By

Balance Sheet

43
Q

Where would a Mortgage / Loan go ?

A

Non - Current Liabilities

Above Financed by (Balance Sheet)

44
Q

Is Non - Current Assets added to Financed By in calculating the final value ?

A

No, Non - Current Liabilities are subtracted from “Net Assets”

To obtain the value which has to be Balanced by the final Value in Financed By

45
Q

What value would be taken to Financed By is There are “Preference shares of £1 fully paid and are valued at 100”

A

Preference Shares = £100

46
Q

What value would be taken to Financed By if there are “Ordinary shares of £0.5 fully paid and are valued at 100”

A

Ordinary Shares = £50

47
Q

What do you do if a note says, E.g.

“Preliminary Expenses are to written down by transfer from Share Premium”

A

(Under Financed By)

Share Premium Value - Preliminary Expenses

E.g.

110 - 9 = £101

48
Q

If Factory Machinery is in the trial balance how would you tell if it is an Asset or a Factory Overhead ?

A
  1. “Factory Machinery at Cost”

2. Check Notes for “Assets are to be depreciated….”

49
Q

What would you have missed if you have a really high Gross Profit in the income statement after a Manufacturing Account ?

A

Market Value (usually around £500)

50
Q

If VAT is in the “DR” column, where will it go?

A

Current Assets

51
Q

If [Cash / Bank] is in “CR” column where will it go ?

A

Current Liabilities

52
Q

Where does “Corporation Tax Payable” get taken to?

A

Current Liabilities

53
Q

Even if your Balance Sheet Balances could it still be wrong ?

A

Yes, it can still balance if you miss certain things out…

54
Q

How do you Calculate “Net Assets” ?

A

(Current Assets - Current Liabilities) + (Total from N-CA + I.A)

55
Q

How do you Calculate Working Capital ?

A

Current Assets - Current Liabilities

56
Q

What Column do “Current Assets” go ?

A

2nd Column, (I.e. Agg Dep)

57
Q

Why column do “Current Liabilities” go ?

A

1st Column, (I.e Cost)

58
Q

What are the 2 ways to include Provision for Bad Debts in Current Assets

A
  1. Debtors (- Provision)

Or

  1. Debtors X
    Provision Y Z

I.e Debtors ( X ) - Provision ( Y ) = Z

59
Q

Where do “Creditors” go ?

A

Current Liabilities

60
Q

Where do “Debtors” go ?

A

Current Assets

61
Q

What is the heading for a Balance Sheet ?

A

Statement of Financial Position AS AT …. Year …

62
Q

What happens is there is a “Debenture Finance Cost” value AND “8% debentures”

A

Calculate the 8% debentures, take value to Expenses in Income Statement

The value for Debenture FC in trial Balance is the value which has already been paid!

Therefore take the difference to CL

Higher Accounts (3 decks)

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