Prepare cost of goods sold statement for the year ended dec

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Reference no: EM13482672

China Toys manufacturing company Ltd. had a fire that completely destroyed the factory premises. Only few accounting records that could be saved reveal following information:

Items Rs.
Sales 218,800
Financial expenses 600
Cost of goods available for sale 200,000
Raw material purchased 90,000
Direct Labor 35,000
Sales return 2,800
Balance Sheet of previous year contains the following inventory balances:
Items Rs.
Work in process inventory 70,000
Material inventory 8,000
Finished goods inventory 50,000
Accountant of the company on the basis of his past experience presented following percentage relationship:
Selling expenses 5% of Net Sales
Prime cost 60% of Cost of Goods Manufactured
Administrative expenses 8% of Net Sales
Factory overhead 30% of Conversion Cost
Gross profit 30% of Net Sales

Required

1. Prepare Cost of Goods Sold Statement for the year ended Dec 31st, 2009 by adjusting the closing inventories of work in process, finished goods and material. Also show complete working where required.

2. Income statement for the year ended Dec 31st, 2009.

Reference no: EM13482672

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