Trading account of a manufacturing company

In the Trading Account of a manufacturing company, the Production Cost figure (as calculated by drawing up the Manufacturing Statement) should be used in the place of “Purchases” figure. Opening stock of finished goods should be added to Production Cost (or Cost of Goods Manufactured) to arrive at the value of goods available for sale. From this figure should be deducted the value of closing stock of finished goods to arrive at the Cost o! Goods Sold during the year.

Example:

The following information is available from the books of a manufacturing company. Prepare the company’s Manufacturing Statement and Income Statement, in vertical form:

Trading account of a manufacturing concern

Solution:

Trading account of a manufacturing concern Example

manufacturing satement

income satement

Also Check:  Direct and Indirect Expenses

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