How To Prepare the Financial Statements For A Manufacturing Company

Append below are:

(a) The following financial statements for a manufacturing company:

• Statement of Cost Of Goods Manufactured
• Income Statement
• Balance Sheet

(b) Salient points to note in a manufacturing company:

There are three (3) types of inventories namely:

• Raw materials, work in progress and finished goods
• Remember that:

Cost of Goods Manufactured = Beginning Work in progress Plus Total current manufacturing cost( direct labor + factory overheads) Minus Ending work in progress

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FORMAT of Statement of Cost Of Goods Manufactured for year ended 31 st December 2008

	$		$
Opening work in progress			XXX
Direct material
Opening inventories	XXX
+ Purchases	XXX
Raw material available for use	XXX
-Closing inventories	(XX)
Raw material consumed/used		XXX
Direct labor		XXX
Factory overhead:
Indirect material	XX
Indirect labor	XX
Others	XX
Total factory overhead		XXX
			XXX
Less: Closing work in progress			(XXX)
Total current manufacturing cost			XXX

FORMAT of Income Statement for the year ended 31st Dec 2008

		$	$
Sales Revenue			XXXX
Less: Cost of Goods Sold
Beginning Finished Goods Inventory		XXX
Cost of Goods Manufactured		XXX
Cost of Goods Available for Sale		XXX
-Ending Finished Goods Inventory		(XXX)
Cost of Goods Sold			(XXX)
Gross Profit			XXXX
Less: Operating Expenses			XXXX
Selling Expenses			XXX
Administrative Expenses			XXX
Net Income/(loss)			XXX

Format of Balance Sheet As At 31 st December 2008 ( extracted only Current Asset portion )

		$	$
Current Assets
Cash			XXX
Accounts Receivable			XXX
Inventories:
Raw Materials		XX
Work in progress		XX
Finished goods		XX	XXX
Sundry deposits and prepayment			XXX
Total Current Assets			XXX