LESSON
GRADE 11
79
WEEK 24 - Lesson 7 of 16
MANUFACTURING
WORKSHEET 8
LEDGER ACCOUNTS
EXAMPLE 7 (continuation of Example 5 and 6)
REQUIRED
Use the information extracted from the books of Sun Manufacturers below to draw up the
following ledger accounts:
 Raw material stock account
 Direct materials cost account
 Direct labour cost account
 Consumer stores stock
 Factory overhead cost account
 Work-In-Process stock account
 Cost of sales account
INFORMATION
Balances in the stock accounts
Raw materials stock
Consumables stores stock
(Indirect materials stock)
Work-In-Process stock
Finished goods stock
1 March 2013
18 000
28 February 2014
20 000
4 000
6 000
21 000
3 000
19 300
15 100
Transactions for the period
Raw materials purchased
Cash
Credit
Carriage on purchases (paid cash)
Raw materials issued to the production department
Direct labour
Wages
Pension contributions
Medical aid contributions
Indirect labour
Salary factory manager
Factory rent
79 Accounting Grade 11 - CAPS
1
40 000
20 000
2 000
6 000
45 000
2 000
1 000
21 000
20 000
9 000
Indirect materials purchased (paid cash)
Factory maintenance
Insurance for factory
Telephone for factory
Water and electricity for factory
Depreciation on factory machinery
Cost of Completed finished goods
Cost of sales of finished goods
Sales of finished goods
2 200
1 800
1 000
400
2 200
3 500
175 000
178 900
380 000
ANSWER
GENERAL LEDGER OF SUN MANUFACTURERS
BALANCE SHEET ACCOUNTS
RAW MATERIAL STOCK
2013
Mar
1
Balance
b/d
18 000
b/d
40 000
20 000
2 000
80 000
20 000
31 Bank
Creditors control
Bank (carriage)
Apr
1
Balance
2014
Feb
28 Direct materials
cost
Balance
60 000
c/d
20 000
80 000
Indirect material left over at year-end is transferred to Consumable stores stock
Reversal of the adjustment beginning of next financial year
CONSUMABLE STORES STOCK
2013
Mar
1
2014
Feb
28
Balance
(indirect material)
(reversal )
Indirect material
b/d
4 000
3 000
2013
Mar
1
2014
Feb
28
Indirect material
(reversal of
adjustment)
Balance
4 000
c/d
7 000
2014
Mar
1
Balance
b/d
3 000
7 000
3 000
NOMINAL ACCOUNTS
INDIRECT MATERIALS
2013
Mar
28
Consumable
stores on hand
2014
Feb
4 000
(reversal)
2014
Feb
28
Bank
(purchases)
28
Consumable
stores stock
(left over year
3 000
Factory
overhead cost
3 200
end) GIVEN
2 200
(Indirect materials
used) UNKNOWN
6 200
79 Accounting Grade 11 - CAPS
??
6 200
2
COST ACCOUNTS
DIRECT MATERIAL COST
2014
Feb
28
Apr
1
Raw material
stock
2014
Feb
60 000
60 000
Work-In-Process
28 stock
60 000
60 000
DIRECT LABOUR COST
2014
Feb
28 Bank
Pension
contributions
Medical aid
contributions
2014
Feb
45 000
Work-In-Process
28 stock
48 000
2000
1 000
48 000
48 000
Transfer all costs relating to factory (depreciation on machinery, electricity, etc) to the
Factory overhead cost account
FACTORY OVERHEAD COSTS
2014
Feb
28
Indirect materials
3 200
Indirect labour
Factory rent
Insurance
Water & electricity
Depreciation
Telephone
Salaries
(factory manager)
Maintenance
21 000
9 000
1 000
2 200
3 500
400
2014
Feb
28
Work-In-Process
stock
57 100
15 000
1 800
57 100
57 100
The three cost accounts



Direct material cost
Direct labour cost
Factory overhead cost
are used to prepare the Work-In-Process stock account
BALANCE SHEET ACCOUNT
WORK-IN-PROCESS STOCK
2013
Mar
2014
Feb
1
28
Balance
Direct material
cost
Direct labour cost
Factory overhead
cost
2014
Feb
6 000
60 000
48 000
Finished goods
stock UNKNOWN
Balance
GIVEN
??
c/d
151 800
19 300
57 100
171 100
79 Accounting Grade 11 - CAPS
28
171 100
3
From the Work-In-Process stock account, the finished goods are posted to the
 Finished Goods Stock account
FINISHED GOODS STOCK
2013
Mar
2014
Feb
1
28
Balance
Work-In-Process
stock
b/d
2014
Feb
21 000
Cost of sales
28
UNKNOWN
Balance
GIVEN
151 800
??
c/d
172 800
2014
Mar
1
Balance
c/d
157 700
15 100
172 800
157 700
NOMINAL ACCOUNTS
COST OF SALES
2014
Feb
28
Finished goods
stock
31
2014
Feb
157 700
??
28
Trading account
157 700
157 700
157 700
The Trading account does not form part of the Grade 11 curriculum,
but shows the complete cycle.
FINAL ACCOUNTS
TRADING ACCOUNT
2014
Feb
28
Cost of sales
Profit and loss
(gross profit)
79 Accounting Grade 11 - CAPS
2014
Feb
157 700
202 300
360 000
28
Sales (given)
360 000
360 000
4
SELLING AND DISTRIBUTION COSTS
In addition to the manufacturing accounts, there are two more operating activities:
Selling and distribution costs
(separate account)
Administration costs
(separate account)
These accounts have nothing to do with the manufacturing process and are closed off to the
Profit and loss account
SELLING AND DISTRIBUTION COSTS
Profit and loss
Salaries
Depreciation
Bad debts
Commission on sales
Salaries
Depreciation
Insurance
Sundry administration costs
Rent expense
ADMINISTRATION COSTS
Profit and loss
Do an activity from the text book
79 Accounting Grade 11 - CAPS
5
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