From the following information, prepare a manufacturing account and income statement for the year ending 31 December 2022 and a balance sheet as at 31 December 2022 for Getachew’s business: Sh Sh Purchase of raw materials 258,000 Fuel and light 21,000 Administration salaries 17,000 Factory wages 59,000 Carriage outwards 4,000 Rent and business rates 21,000 Sales 482,000 Returns inward 7,000 General office expenses 9,000 Repairs to plant and machinery 9,000 Inventory at 1 January 2022: Raw materials 21,000 Work-in-progress 14,000 Finished goods 23,000 Sundry accounts payable 37,000 Capital account 457,000 Freehold premises 410,000 Plant and machinery 80,000 Accounts receivable 20,000 Accumulated depreciation on plant and machinery 8,000 Cash in hand 11,000 984,000 984,000 Make provision for the following: (i) Inventory in hand at 31 December 2022: Raw materials Sh 25,000 Work-in-progress Sh 11,000 Finished goods Sh 26,000. (ii) Depreciation of 10% on plant and machinery using the straight line method. (iii) 80% of fuel and light and 75% of rent and rates to be charged to manufacturing. (iv) Allowance for doubtful debts: 5% of accounts receivable. (v) Sh 4,000 outstanding for fuel and light. (vi) Rent and business rates paid in advance: Sh 5,000 Manufacturing Trading and Income Statement for the year ending 31 December 2022 Sh Sh Sh Net sales Cost of raw materials used Factory wages Prime cost Fuel and light Rent and business rates Repairs to plant and machinery Depreciation for plant and machinery Manufacturing costs Add opening work in progress Total work in progress Less closing work in progress Cost of goods manufactured Add opening finished goods stock Total cost of goods available Less closing finished goods stock Cost of goods sold Gross profit Expenses; Fuel and light Salaries Rent and business rates Office expenses Selling and distribution expenses Financial charges (increase in provisions for doubtful debts) Net profit Balance Sheet as at 31 December 2022 Non-current assets Premises Plant and machinery (net book value) Total non-current assets Current assets; Raw material inventory Work in progress inventory Finished goods inventory Accounts receivable Prepayments Bank Total assets Current liabilities Accounts payable Accruals Net assets Financed by Closing capital Jump to...

Sure, let's prepare the Manufacturing Trading and Income Statement and the Balance Sheet for Getachew's business.

First, let's calculate the Manufacturing Trading and Income Statement:

1. Net Sales: Sales - Returns inward = 482,000 - 7,000 = 475,000
2. Cost of raw materials used: Opening raw materials + Purchase of raw materials - Closing raw materials = 21,000 + 258,000 - 25,000 = 254,000
3. Factory wages: 59,000
4. Prime cost: Cost of raw materials used + Factory wages = 254,000 + 59,000 = 313,000
5. Fuel and light: 80% of 21,000 = 16,800
6. Rent and business rates: 75% of 21,000 = 15,750
7. Repairs to plant and machinery: 9,000
8. Depreciation for plant and machinery: 10% of 80,000 = 8,000
9. Manufacturing costs: Fuel and light + Rent and business rates + Repairs to plant and machinery + Depreciation for plant and machinery = 16,800 + 15,750 + 9,000 + 8,000 = 49,550
10. Add opening work in progress: 14,000
11. Total work in progress: Prime cost + Manufacturing costs + Opening work in progress = 313,000 + 49,550 + 14,000 = 376,550
12. Less closing work in progress: 11,000
13. Cost of goods manufactured: Total work in progress - Closing work in progress = 376,550 - 11,000 = 365,550
14. Add opening finished goods stock: 23,000
15. Total cost of goods available: Cost of goods manufactured + Opening finished goods stock = 365,550 + 23,000 = 388,550
16. Less closing finished goods stock: 26,000
17. Cost of goods sold: Total cost of goods available - Closing finished goods stock = 388,550 - 26,000 = 362,550
18. Gross profit: Net Sales - Cost of goods sold = 475,000 - 362,550 = 112,450
19. Expenses: Fuel and light (20% of 21,000) + Salaries + Rent and business rates (25% of 21,000) + Office expenses + Selling and distribution expenses (Carriage outwards) + Financial charges (5% of Accounts receivable) = 4,200 + 17,000 + 5,250 + 9,000 + 4,000 + 1,000 = 40,450
20. Net profit: Gross profit - Expenses = 112,450 - 40,450 = 72,000

Now, let's calculate the Balance Sheet:

1. Non-current assets: Premises + Plant and machinery (net book value) = 410,000 + (80,000 - 8,000 - 8,000) = 474,000
2. Current assets: Raw material inventory + Work in progress inventory + Finished goods inventory + Accounts receivable - Allowance for doubtful debts + Prepayments + Bank = 25,000 + 11,000 + 26,000 + 20,000 - 1,000 + 5,000 + 11,000 = 97,000
3. Total assets: Non-current assets + Current assets = 474,000 + 97,000 = 571,000
4. Current liabilities: Accounts payable + Accruals = 37,000 + 4,000 = 41,000
5. Net assets: Total assets - Current liabilities = 571,000 - 41,000 = 530,000
6. Financed by: Closing capital = Net assets = 530,000

Please note that the calculations are based on the provided data and assumptions.

Sure, let's prepare the Manufacturing Account, Income Statement and Balance Sheet for Getachew's business.

Step 1: Manufacturing Account

Opening stock of raw materials: 21,000 Add: Purchase of raw materials: 258,000 Less: Closing stock of raw materials: 25,000 Cost of raw materials used: 254,000

Add: Factory wages: 59,000 Prime cost: 313,000

Add: Fuel and light (80% of 21,000): 16,800 Add: Rent and business rates (75% of 21,000): 15,750 Add: Repairs to plant and machinery: 9,000 Add: Depreciation for plant and machinery (10% of 80,000): 8,000 Manufacturing costs: 49,550

Add: Opening work in progress: 14,000 Total work in progress: 376,550 Less: Closing work in progress: 11,000 Cost of goods manufactured: 365,550

Step 2: Income Statement

Sales: 482,000 Less: Returns inward: 7,000 Net sales: 475,000

Add: Opening finished goods stock: 23,000 Total cost of goods available: 388,550 Less: Closing finished goods stock: 26,000 Cost of goods sold: 362,550

Gross profit: 112,450

Less: Expenses Fuel and light (20% of 21,000): 4,200 Salaries: 17,000 Rent and business rates (25% of 21,000): 5,250 Office expenses: 9,000 Selling and distribution expenses (Carriage outwards): 4,000 Financial charges (increase in provisions for doubtful debts, 5% of 20,000): 1,000 Total expenses: 40,450

Net profit: 72,000

Step 3: Balance Sheet

Non-current assets: Premises: 410,000 Plant and machinery (net book value, 80,000 - 8,000 - 8,000): 64,000 Total non-current assets: 474,000

Current assets: Raw material inventory: 25,000 Work in progress inventory: 11,000 Finished goods inventory: 26,000 Accounts receivable (20,000 - 1,000): 19,000 Prepayments (Rent and business rates paid in advance): 5,000 Bank (Cash in hand): 11,000 Total current assets: 97,000

Total assets: 571,000

Current liabilities: Accounts payable: 37,000 Accruals (Outstanding for fuel and light): 4,000 Total current liabilities: 41,000

Net assets: 530,000

Financed by: Opening capital: 457,000 Add: Net profit: 72,000 Less: Drawings (to balance): -1,000 Closing capital: 528,000

Please note that the figures are in Sh (presumably Shillings).