Important Questions & Answers: Departmental Accounts | Accounting for CA Intermediate (Old Scheme) PDF Download

 Page 1


Departmental Accounts
Q-1 ABC Ltd. has several departments. Goods supplied to each department are debited to a Memorandum
Departmental Stock Account at cost plus a fixed percentage (mark-up) to give the normal selling price.
The amount of mark-up is credited to a Memorandum Departmental Markup account. If the selling
price of goods is reduced below its normal selling prices, the reduction (mark-down) will require
adjustment both in the stock account and the mark-up account. The mark-up for department X for the
last three years has been 20%. Figures relevant to department X for the year ended 31
st
 March, 2019
were as follows;
Stock as on 1
st
 April, 2018, at cost ` 1,50,000
Purchases at cost ` 4,30,000
Sales ` 6,50,000
It is further ascertained that:
(1) Shortage of stock found in the year ending 31.3.2019, costing ` 4,000 were written off.
(2) Opening stock on 1.4.2018 including goods costing ` 12,000 had been sold during the year and had
been marked-down in the selling price by `1,600. The remaining stock had been sold during the
year.
(3) Goods purchased during the year were marked down by ` 3,600 from a cost of ? 30,000. Marked-
down stock costing ? 10,000 remained unsold on 31.3.2019.
(4) The departmental closing stock is to be valued at cost subject to adjustment for mark-up and
mark-down.
You are required to prepare for the year ended 31
st
 March, 2019 :
(i) Departmental Trading Account for department X for the year ended 31
st
 March, 2019 in the books
of head office.
(ii) Memorandum Stock Account for the year ended 31
st
 March, 2019.
(iii) Memorandum Mark-Up account for the year ended 31
st
 March, 2019.
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Page 2


Departmental Accounts
Q-1 ABC Ltd. has several departments. Goods supplied to each department are debited to a Memorandum
Departmental Stock Account at cost plus a fixed percentage (mark-up) to give the normal selling price.
The amount of mark-up is credited to a Memorandum Departmental Markup account. If the selling
price of goods is reduced below its normal selling prices, the reduction (mark-down) will require
adjustment both in the stock account and the mark-up account. The mark-up for department X for the
last three years has been 20%. Figures relevant to department X for the year ended 31
st
 March, 2019
were as follows;
Stock as on 1
st
 April, 2018, at cost ` 1,50,000
Purchases at cost ` 4,30,000
Sales ` 6,50,000
It is further ascertained that:
(1) Shortage of stock found in the year ending 31.3.2019, costing ` 4,000 were written off.
(2) Opening stock on 1.4.2018 including goods costing ` 12,000 had been sold during the year and had
been marked-down in the selling price by `1,600. The remaining stock had been sold during the
year.
(3) Goods purchased during the year were marked down by ` 3,600 from a cost of ? 30,000. Marked-
down stock costing ? 10,000 remained unsold on 31.3.2019.
(4) The departmental closing stock is to be valued at cost subject to adjustment for mark-up and
mark-down.
You are required to prepare for the year ended 31
st
 March, 2019 :
(i) Departmental Trading Account for department X for the year ended 31
st
 March, 2019 in the books
of head office.
(ii) Memorandum Stock Account for the year ended 31
st
 March, 2019.
(iii) Memorandum Mark-Up account for the year ended 31
st
 March, 2019.
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Ans.(i) Department Trading Account for Department X
For the year ending on 31.03.2019
In the books of Head Office
Particulars ` Particulars `
To Opening Stock 1,50,000 By Sales 6,50,000
To Purchases 4,30,000 By Shortage 4,000
To Gross Profit c/d 1,05,000 By Closing Stock 31,000
6,85,000 6,85,000
(ii) Memorandum Stock Account (for Department X) (at selling price)
Particulars ` Particulars `
To Balance b/d
(` 1,50,000+20% of
` 1,50,000) 1,80,000 By Profit & Loss A/c (Cost of Shortage) 4,000
To Purchases
(` 4,30,000 + 20% of
` 4,30,000) 5,16,000 By Memorandum Departmental
Mark up A/c (Load on Shortage)
(` 4,000 x 20%) 800
By Memorandum Departmental
Mark-up A/c (Mark-down on
Current Purchases) 3,600
By Debtors A/c (Sales) 6,50,000
By Memorandum Departmental
Mark-up A/c (Mark Down on
Opening Stock) 1,600
_______ By Balance c/d 36,000
6,96,000 6,96,000
(iii) Memorandum Departmental Mark-up Account
Particulars ` Particulars `
To Memorandum 800 By Balance b/d 30,000
Departmental Stock A/c (` 1,80,000 x 20/120)
(` 4,000 × 20/100)
To Memorandum 3,600 By Memorandum 86,000
Departmental Stock A/c Departmental Stock A/c
To Memorandum 1,600 (` 5,16,000 x 20/120)
Departmental Stock A/c
To Gross Profit transferred
to Profit & Loss A/c 1,05,000
To Balance c/d [(` 36,000
+ 1,200*) x 20/120 - ` 1,200] 5,000 _______
1,16,000 1,16,000
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Page 3


Departmental Accounts
Q-1 ABC Ltd. has several departments. Goods supplied to each department are debited to a Memorandum
Departmental Stock Account at cost plus a fixed percentage (mark-up) to give the normal selling price.
The amount of mark-up is credited to a Memorandum Departmental Markup account. If the selling
price of goods is reduced below its normal selling prices, the reduction (mark-down) will require
adjustment both in the stock account and the mark-up account. The mark-up for department X for the
last three years has been 20%. Figures relevant to department X for the year ended 31
st
 March, 2019
were as follows;
Stock as on 1
st
 April, 2018, at cost ` 1,50,000
Purchases at cost ` 4,30,000
Sales ` 6,50,000
It is further ascertained that:
(1) Shortage of stock found in the year ending 31.3.2019, costing ` 4,000 were written off.
(2) Opening stock on 1.4.2018 including goods costing ` 12,000 had been sold during the year and had
been marked-down in the selling price by `1,600. The remaining stock had been sold during the
year.
(3) Goods purchased during the year were marked down by ` 3,600 from a cost of ? 30,000. Marked-
down stock costing ? 10,000 remained unsold on 31.3.2019.
(4) The departmental closing stock is to be valued at cost subject to adjustment for mark-up and
mark-down.
You are required to prepare for the year ended 31
st
 March, 2019 :
(i) Departmental Trading Account for department X for the year ended 31
st
 March, 2019 in the books
of head office.
(ii) Memorandum Stock Account for the year ended 31
st
 March, 2019.
(iii) Memorandum Mark-Up account for the year ended 31
st
 March, 2019.
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Ans.(i) Department Trading Account for Department X
For the year ending on 31.03.2019
In the books of Head Office
Particulars ` Particulars `
To Opening Stock 1,50,000 By Sales 6,50,000
To Purchases 4,30,000 By Shortage 4,000
To Gross Profit c/d 1,05,000 By Closing Stock 31,000
6,85,000 6,85,000
(ii) Memorandum Stock Account (for Department X) (at selling price)
Particulars ` Particulars `
To Balance b/d
(` 1,50,000+20% of
` 1,50,000) 1,80,000 By Profit & Loss A/c (Cost of Shortage) 4,000
To Purchases
(` 4,30,000 + 20% of
` 4,30,000) 5,16,000 By Memorandum Departmental
Mark up A/c (Load on Shortage)
(` 4,000 x 20%) 800
By Memorandum Departmental
Mark-up A/c (Mark-down on
Current Purchases) 3,600
By Debtors A/c (Sales) 6,50,000
By Memorandum Departmental
Mark-up A/c (Mark Down on
Opening Stock) 1,600
_______ By Balance c/d 36,000
6,96,000 6,96,000
(iii) Memorandum Departmental Mark-up Account
Particulars ` Particulars `
To Memorandum 800 By Balance b/d 30,000
Departmental Stock A/c (` 1,80,000 x 20/120)
(` 4,000 × 20/100)
To Memorandum 3,600 By Memorandum 86,000
Departmental Stock A/c Departmental Stock A/c
To Memorandum 1,600 (` 5,16,000 x 20/120)
Departmental Stock A/c
To Gross Profit transferred
to Profit & Loss A/c 1,05,000
To Balance c/d [(` 36,000
+ 1,200*) x 20/120 - ` 1,200] 5,000 _______
1,16,000 1,16,000
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*[` 3,600 ×10,000/ 30,000] = ` 1,200. Alternatively, this adjustment of ` 1,200 may be routed through
Memorandum Stock Account.
Working Notes:
(i) Calculation of Cost of Sales
`
A Sales as per Books 6,50,000
B Add: Mark-down in opening stock (given) 1,600
C Add: mark-down in sales out of current Purchases
(` 3,600 x 20,000 / 30,000) 2,400
D Value of sales if there was no mark-down (A+B+C) 6,54,000
E Less: Gross Profit (20/120 of ` 6,54,000) subject to Mark Down (1,09,000)
F Cost of sales (D-E) 5,45,000
(ii) Calculation of Closing Stock
`
A Opening Stock 1,50,000
B Add: Purchases 4,30,000
C Less: Cost of Sales (5,45,000)
D Less: Shortage (4,000)
E Closing Stock (A+B-C-D) 31,000
Q-2 Axe Limited has four departments, A, B, C and D. Department A sells goods to other partments at a
profit of 25% on cost. Department B sells goods to other department at a profit of 30% on sales.
Department C sells goods to other departments at a profit of 10% on cost, Department D sells goods to
other departments at a profit of 15% on sales.
Stock lying at different departments at the year-end was as follows :
Department Department Department Department
A B C D
Transfer from Department A - 45,000 50,000 60,000
Trasfer from Department B 50,000 - - 75,000
Trasfer from Departmnet C 33,000 22,000 - -
Trasfer from Department D 40,000 10,000 65,000 -
Departmental managers are entitled to 10% commission on net profit subject to unrealized profit on
departmental sales being eliminated.
Departmental profits after charging manager's commission, but before adjustment of unrealized profit are
as under:
`
Department A 2,25,000
Department B 3,37,500
Department C 1,80,000
Department D 4,50,000
Calculate the correct departmental profit after charging Manager’s commission.
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Page 4


Departmental Accounts
Q-1 ABC Ltd. has several departments. Goods supplied to each department are debited to a Memorandum
Departmental Stock Account at cost plus a fixed percentage (mark-up) to give the normal selling price.
The amount of mark-up is credited to a Memorandum Departmental Markup account. If the selling
price of goods is reduced below its normal selling prices, the reduction (mark-down) will require
adjustment both in the stock account and the mark-up account. The mark-up for department X for the
last three years has been 20%. Figures relevant to department X for the year ended 31
st
 March, 2019
were as follows;
Stock as on 1
st
 April, 2018, at cost ` 1,50,000
Purchases at cost ` 4,30,000
Sales ` 6,50,000
It is further ascertained that:
(1) Shortage of stock found in the year ending 31.3.2019, costing ` 4,000 were written off.
(2) Opening stock on 1.4.2018 including goods costing ` 12,000 had been sold during the year and had
been marked-down in the selling price by `1,600. The remaining stock had been sold during the
year.
(3) Goods purchased during the year were marked down by ` 3,600 from a cost of ? 30,000. Marked-
down stock costing ? 10,000 remained unsold on 31.3.2019.
(4) The departmental closing stock is to be valued at cost subject to adjustment for mark-up and
mark-down.
You are required to prepare for the year ended 31
st
 March, 2019 :
(i) Departmental Trading Account for department X for the year ended 31
st
 March, 2019 in the books
of head office.
(ii) Memorandum Stock Account for the year ended 31
st
 March, 2019.
(iii) Memorandum Mark-Up account for the year ended 31
st
 March, 2019.
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Ans.(i) Department Trading Account for Department X
For the year ending on 31.03.2019
In the books of Head Office
Particulars ` Particulars `
To Opening Stock 1,50,000 By Sales 6,50,000
To Purchases 4,30,000 By Shortage 4,000
To Gross Profit c/d 1,05,000 By Closing Stock 31,000
6,85,000 6,85,000
(ii) Memorandum Stock Account (for Department X) (at selling price)
Particulars ` Particulars `
To Balance b/d
(` 1,50,000+20% of
` 1,50,000) 1,80,000 By Profit & Loss A/c (Cost of Shortage) 4,000
To Purchases
(` 4,30,000 + 20% of
` 4,30,000) 5,16,000 By Memorandum Departmental
Mark up A/c (Load on Shortage)
(` 4,000 x 20%) 800
By Memorandum Departmental
Mark-up A/c (Mark-down on
Current Purchases) 3,600
By Debtors A/c (Sales) 6,50,000
By Memorandum Departmental
Mark-up A/c (Mark Down on
Opening Stock) 1,600
_______ By Balance c/d 36,000
6,96,000 6,96,000
(iii) Memorandum Departmental Mark-up Account
Particulars ` Particulars `
To Memorandum 800 By Balance b/d 30,000
Departmental Stock A/c (` 1,80,000 x 20/120)
(` 4,000 × 20/100)
To Memorandum 3,600 By Memorandum 86,000
Departmental Stock A/c Departmental Stock A/c
To Memorandum 1,600 (` 5,16,000 x 20/120)
Departmental Stock A/c
To Gross Profit transferred
to Profit & Loss A/c 1,05,000
To Balance c/d [(` 36,000
+ 1,200*) x 20/120 - ` 1,200] 5,000 _______
1,16,000 1,16,000
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*[` 3,600 ×10,000/ 30,000] = ` 1,200. Alternatively, this adjustment of ` 1,200 may be routed through
Memorandum Stock Account.
Working Notes:
(i) Calculation of Cost of Sales
`
A Sales as per Books 6,50,000
B Add: Mark-down in opening stock (given) 1,600
C Add: mark-down in sales out of current Purchases
(` 3,600 x 20,000 / 30,000) 2,400
D Value of sales if there was no mark-down (A+B+C) 6,54,000
E Less: Gross Profit (20/120 of ` 6,54,000) subject to Mark Down (1,09,000)
F Cost of sales (D-E) 5,45,000
(ii) Calculation of Closing Stock
`
A Opening Stock 1,50,000
B Add: Purchases 4,30,000
C Less: Cost of Sales (5,45,000)
D Less: Shortage (4,000)
E Closing Stock (A+B-C-D) 31,000
Q-2 Axe Limited has four departments, A, B, C and D. Department A sells goods to other partments at a
profit of 25% on cost. Department B sells goods to other department at a profit of 30% on sales.
Department C sells goods to other departments at a profit of 10% on cost, Department D sells goods to
other departments at a profit of 15% on sales.
Stock lying at different departments at the year-end was as follows :
Department Department Department Department
A B C D
Transfer from Department A - 45,000 50,000 60,000
Trasfer from Department B 50,000 - - 75,000
Trasfer from Departmnet C 33,000 22,000 - -
Trasfer from Department D 40,000 10,000 65,000 -
Departmental managers are entitled to 10% commission on net profit subject to unrealized profit on
departmental sales being eliminated.
Departmental profits after charging manager's commission, but before adjustment of unrealized profit are
as under:
`
Department A 2,25,000
Department B 3,37,500
Department C 1,80,000
Department D 4,50,000
Calculate the correct departmental profit after charging Manager’s commission.
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Answer
Calculation of correct departmental profits
Department Department Department Department
A B C D
` ` ` `
Profit after charging managers’ commission 2,25,000 3,75,500 1,80,000 4,50,000
Add back: managers’ commission (1/9) 25,000 37,500 20,000 50,000
2,50,000 3,75,000 2,00,000 5,00,000
Less: Unrealized profit on stock (Working Note) 31,000 37,500 5,000 17,250
Profit before Manager’s commission 2,19,000 3,37,500 1,95,000 4,82,750
Less : Commission for Department Manager @ 10% 21,900 33,750 19,500 48,275
Correct Department Profit after manager’s commission 1,97,100 3,03,750 1,75,500 4,34,475
Working Note:
Stock lying with
Dept. A Dept.B Dept.C Dept.D Total
` ` ` ` `
Unrealized Profit of Department A 45,000 x 50,000 x 60,000 x 31,000
25 /125=9,000 25 /125=10,000 25 /125=12,000
Department B 50,000x0.3 75,000x0.3 37,500
= 15,000 = 22,500
Department C 33,000 x 22,000 x 5,000
10/110 = 10/110 =
3,000 2,000
Department D 40,000 x .15 10,000 x 0.15 65,000 x 0.15 17,250
= 6,000 = 1,500 = 9,750
Q-3 M/s. Delta is a Department Store having three department X, Y and Z. The information regardin three
department for the year ended 31st March, 2019 are given below :
Particular Dept.X Dept.Y Dept.Z
Opening Stock 18,000 12,000 10,000
Purchases 66,000 44,000 22,000
Debtors at end 7,500 5,000 5,000
Sales 90,000 67,500 45,000
Closing Stock 22,500 8,750 10,500
Value of furniture in each Department 10,000 10,000 5,000
Floor space occupied by each Dept. (in sq. ft.) 1,500 1,250 1,000
Number of employees in each Department 25 20 15
Electricity consumed by each Department (in units) 300 200 100
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Page 5


Departmental Accounts
Q-1 ABC Ltd. has several departments. Goods supplied to each department are debited to a Memorandum
Departmental Stock Account at cost plus a fixed percentage (mark-up) to give the normal selling price.
The amount of mark-up is credited to a Memorandum Departmental Markup account. If the selling
price of goods is reduced below its normal selling prices, the reduction (mark-down) will require
adjustment both in the stock account and the mark-up account. The mark-up for department X for the
last three years has been 20%. Figures relevant to department X for the year ended 31
st
 March, 2019
were as follows;
Stock as on 1
st
 April, 2018, at cost ` 1,50,000
Purchases at cost ` 4,30,000
Sales ` 6,50,000
It is further ascertained that:
(1) Shortage of stock found in the year ending 31.3.2019, costing ` 4,000 were written off.
(2) Opening stock on 1.4.2018 including goods costing ` 12,000 had been sold during the year and had
been marked-down in the selling price by `1,600. The remaining stock had been sold during the
year.
(3) Goods purchased during the year were marked down by ` 3,600 from a cost of ? 30,000. Marked-
down stock costing ? 10,000 remained unsold on 31.3.2019.
(4) The departmental closing stock is to be valued at cost subject to adjustment for mark-up and
mark-down.
You are required to prepare for the year ended 31
st
 March, 2019 :
(i) Departmental Trading Account for department X for the year ended 31
st
 March, 2019 in the books
of head office.
(ii) Memorandum Stock Account for the year ended 31
st
 March, 2019.
(iii) Memorandum Mark-Up account for the year ended 31
st
 March, 2019.
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Ans.(i) Department Trading Account for Department X
For the year ending on 31.03.2019
In the books of Head Office
Particulars ` Particulars `
To Opening Stock 1,50,000 By Sales 6,50,000
To Purchases 4,30,000 By Shortage 4,000
To Gross Profit c/d 1,05,000 By Closing Stock 31,000
6,85,000 6,85,000
(ii) Memorandum Stock Account (for Department X) (at selling price)
Particulars ` Particulars `
To Balance b/d
(` 1,50,000+20% of
` 1,50,000) 1,80,000 By Profit & Loss A/c (Cost of Shortage) 4,000
To Purchases
(` 4,30,000 + 20% of
` 4,30,000) 5,16,000 By Memorandum Departmental
Mark up A/c (Load on Shortage)
(` 4,000 x 20%) 800
By Memorandum Departmental
Mark-up A/c (Mark-down on
Current Purchases) 3,600
By Debtors A/c (Sales) 6,50,000
By Memorandum Departmental
Mark-up A/c (Mark Down on
Opening Stock) 1,600
_______ By Balance c/d 36,000
6,96,000 6,96,000
(iii) Memorandum Departmental Mark-up Account
Particulars ` Particulars `
To Memorandum 800 By Balance b/d 30,000
Departmental Stock A/c (` 1,80,000 x 20/120)
(` 4,000 × 20/100)
To Memorandum 3,600 By Memorandum 86,000
Departmental Stock A/c Departmental Stock A/c
To Memorandum 1,600 (` 5,16,000 x 20/120)
Departmental Stock A/c
To Gross Profit transferred
to Profit & Loss A/c 1,05,000
To Balance c/d [(` 36,000
+ 1,200*) x 20/120 - ` 1,200] 5,000 _______
1,16,000 1,16,000
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*[` 3,600 ×10,000/ 30,000] = ` 1,200. Alternatively, this adjustment of ` 1,200 may be routed through
Memorandum Stock Account.
Working Notes:
(i) Calculation of Cost of Sales
`
A Sales as per Books 6,50,000
B Add: Mark-down in opening stock (given) 1,600
C Add: mark-down in sales out of current Purchases
(` 3,600 x 20,000 / 30,000) 2,400
D Value of sales if there was no mark-down (A+B+C) 6,54,000
E Less: Gross Profit (20/120 of ` 6,54,000) subject to Mark Down (1,09,000)
F Cost of sales (D-E) 5,45,000
(ii) Calculation of Closing Stock
`
A Opening Stock 1,50,000
B Add: Purchases 4,30,000
C Less: Cost of Sales (5,45,000)
D Less: Shortage (4,000)
E Closing Stock (A+B-C-D) 31,000
Q-2 Axe Limited has four departments, A, B, C and D. Department A sells goods to other partments at a
profit of 25% on cost. Department B sells goods to other department at a profit of 30% on sales.
Department C sells goods to other departments at a profit of 10% on cost, Department D sells goods to
other departments at a profit of 15% on sales.
Stock lying at different departments at the year-end was as follows :
Department Department Department Department
A B C D
Transfer from Department A - 45,000 50,000 60,000
Trasfer from Department B 50,000 - - 75,000
Trasfer from Departmnet C 33,000 22,000 - -
Trasfer from Department D 40,000 10,000 65,000 -
Departmental managers are entitled to 10% commission on net profit subject to unrealized profit on
departmental sales being eliminated.
Departmental profits after charging manager's commission, but before adjustment of unrealized profit are
as under:
`
Department A 2,25,000
Department B 3,37,500
Department C 1,80,000
Department D 4,50,000
Calculate the correct departmental profit after charging Manager’s commission.
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Answer
Calculation of correct departmental profits
Department Department Department Department
A B C D
` ` ` `
Profit after charging managers’ commission 2,25,000 3,75,500 1,80,000 4,50,000
Add back: managers’ commission (1/9) 25,000 37,500 20,000 50,000
2,50,000 3,75,000 2,00,000 5,00,000
Less: Unrealized profit on stock (Working Note) 31,000 37,500 5,000 17,250
Profit before Manager’s commission 2,19,000 3,37,500 1,95,000 4,82,750
Less : Commission for Department Manager @ 10% 21,900 33,750 19,500 48,275
Correct Department Profit after manager’s commission 1,97,100 3,03,750 1,75,500 4,34,475
Working Note:
Stock lying with
Dept. A Dept.B Dept.C Dept.D Total
` ` ` ` `
Unrealized Profit of Department A 45,000 x 50,000 x 60,000 x 31,000
25 /125=9,000 25 /125=10,000 25 /125=12,000
Department B 50,000x0.3 75,000x0.3 37,500
= 15,000 = 22,500
Department C 33,000 x 22,000 x 5,000
10/110 = 10/110 =
3,000 2,000
Department D 40,000 x .15 10,000 x 0.15 65,000 x 0.15 17,250
= 6,000 = 1,500 = 9,750
Q-3 M/s. Delta is a Department Store having three department X, Y and Z. The information regardin three
department for the year ended 31st March, 2019 are given below :
Particular Dept.X Dept.Y Dept.Z
Opening Stock 18,000 12,000 10,000
Purchases 66,000 44,000 22,000
Debtors at end 7,500 5,000 5,000
Sales 90,000 67,500 45,000
Closing Stock 22,500 8,750 10,500
Value of furniture in each Department 10,000 10,000 5,000
Floor space occupied by each Dept. (in sq. ft.) 1,500 1,250 1,000
Number of employees in each Department 25 20 15
Electricity consumed by each Department (in units) 300 200 100
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Additinal infromation
Amount Rs.
Carriage inwards 1,500
Carriage outwards 2,700
Salaries 24,000
Advertisement 2,700
Discount allowed 2,250
Discount received 1,800
Rent, Rates and Taxes 7,500
Depreciation on furniture 1,000
Electricity Expenses 3,000
Labour welfare expenses 2,400
Prepare  Departmental  Trading  and Profit &  Loss  Account for the year ended 31st March, 2018 after
providing provision for Bad Debts at 5%.
Ans.             In the Books of M/s Delta Departmental Trading and Profit and Loss Account for the year ended 31st March, 2018
Particulars Deptt.X Deptt.Y Deptt.Z Total Particulars Deptt.X Deptt.Y Deptt.Z Total
` ` ` ` ` ` ` `
To Stock (opening) 18,000 12,000 10,000 40,000 By Sales 90,000 67,500 45,000 2,02,500
To Purchases 66,000 44,000 22,000 1,32,000 By Stock (closing) 22,500 8,750 10,500 41,750
To Carriage Inwards 750 500 250 1,500
To Gross Profit c/d (b.f.) 27,750 19,750 23,250 70,750
1,12,500 76,250 55,500 2,44,250 1,12,500 76,250 55,500 2,44,250
To Carriage Outwards 1,200 900 600 2,700 By Gross Profit b/d 27,750 19,750 23,250 70,750
To Electricity 1,500 1,000 500 3,000 By Discount received 900 600 300 1,800
To Salaries 10,000 8,000 6,000 24,000
To Advertisement 1,200 900 600 2,700
To Discount allowed 1,000 750 500 2,250
To Rent, Rates and Taxes 3,000 2,500 2,000 7,500
To Depreciation 400 400 200 1,000
To Provision for Bad
Debts @ 5% of debtors 375 250 250 875
To Labour welfare expenses 1,000 800 600 2,400
To Net Profit (b.f.) 8,975 4,850 12,300 26,125
28,650 20,350 23,550 72,550 28,650 20,350 23,550 72,550
Working Note :
Basis of allocation of expenses
Carriage inwards Purchases (3:2:1)
Carriage outwards Turnover (4:3:2)
Salaries No.of Employees (5:4:3)
Advertisement Turnover (4:3:2)
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