PROF. BHAMBWANI’S

RELIABLE CLASSES

TYBCOM (CHAPTER WISE) RECORDING WORD FILE

RECONCILATION

LEC 1:THEORY (47 MINS)

LEC 2: (10 MINS)

From the following particulars, prepare Reconciliation Statement and Ascertain Costing

Profit/Loss. Net profit as per financial P & L A/c Rs. 50,000, Opening stock was overvalued by

Rs. 2,000 in Cost Accounts as compared to financial accounts. Administrative overheads charged

in Financial Cost Accounts as compared to financial accounts. Administrative overheads charged

in Financial Books Rs. 20,000 but recovered in Cost Rs. 40,000. Income Tax Provision Rs. 1,200.

Notional Salary of Proprietor in Cost Rs.20,000. Interest Received Rs.12,000, Closing stock as

per financial books Rs.16,200, where as in cost books it was Rs.19,000.

LEC 3: (7 MINS)

From the following, prepare Reconciliation Statement of M/s. XYZ and Company as on 30-6-2004:

1.Net profit as per Financial Accounts Rs.40,340.

2.Income Tax provision made Rs.30,000

3.Materials Purchases of 5,000 units were recorded in cost at standard cost Rs.24 per unit whereas in finance it was recorded at actual cost Rs.22 per unit.

4.Old Bad debts recovered Rs.20,500.

5.Loss on sale of furniture was Rs.4,120

LEC 4: (30 MINS)

The net profit of a company amounted to Rs. 60,412 for the year ending 31st December, 1997 as per its financial records. The cost records, however, revealed a different figure. A scrutiny of the two sets of accounts disclosed the following facts:

(a)Works overhead recovered in Cost Accounts during the period amounted to Rs.28,450 while the actual amount of these expenses was Rs. 21,390 only.

(b)Actual office expenses for the period were Rs. 19,850 whereas the office overhead recovered in Cost Accounts amounted to Rs. 14,500.

(c)The annual rental value of premises owned by the company, amounting to Rs.10,800 was charged in Cost Accounts but not in Financial Accounts.

(d)Selling and distribution expenses for the period amounting to Rs. 16,490 were excluded from costing records.

(e)Expenses not included in cost accounts and shown in Financial Accounts:

Interest on Bank Loan / 1,600
Bank charges / 160
Directors fees / 750
Penalty due to late completion on contract / 2,500

(g)Gains during the year not included in Cost Accounts:

Transfer fees / 45
Profit on sale of investment / 4,250
Interest on investments / 9,450

(h)The following appropriations had been made arriving at the profit figure Rs.60,412, given below :

Transfer to Dividend Equalisation Fund / 10,500
Transfer to Income Tax Reserve / 6,400
Transfer to Debenture Redemption Fund / 9,000

(i)A sum of Rs.10,000 given as donation to the Prime Minister Relief Fund had been charged to Profit and Loss account as business expenses.

Prepare Reconciliation Statement and find the amount of net profit/loss as per the costing records.

LEC 5: (36 MINS)

In the factory of Perfect Limited, two types of products namely "X" and "Y" are manufactured.

From the following particulars, prepare a statement showing total cost per unit, profit per unit

sold and the total profit of the company as per the cost records. There was no opening or closing

stock.

Product X
Rs. / Product Y
Rs.
Raw materials consumed
Direct Labour
Selling and Distribution expenses
(per unit sold) / 9,720
9,000
15 / 16,368
13,200
20

Works on cost is charged at 80% of Direct Labour and office on cost is charged at 60% of works on cost.

The products sold during the period are as under:

a) 180 units of "x" at Rs.200 per unit

b) 220 units of "y" at Rs.260 per unit

Also prepare profit and loss account for the period as per financial books. The actual works expenses being Rs.19,000 office expenses Rs.6,300;selling and distribution expenses Rs.7,100.Also prepare a reconciliation statement reconciling the profit or loss as per cost records with that of financial records.

LEC 6: (37 MINS)

The following is the Trading and Profit and Loss Account of a Manufacturing Company for the

year ending on 31st December,1983:

Trading and Profit and Loss A/c

Rs. / Rs.
To Opening stock 100 units
at Prime Cost
To Materials
To Wages
To Work Overheads
To selling and Distribution
Overheads
To Net Profit / 400
3,000
2,000
2,200
800
1,800 / By Sales (2,400 Units)
By Closing Stock
(200 units) / 9,600
600
10,200 / 10,200

Factory overheads are charged at 40% of Prime Cost, Selling expenses are charged at Rs.0.30 per unit sold. Prepare a cost sheet and a reconciliation statement.

LEC 7: (1 HOUR)

Modern Company Limited furnishes the summary of Trading and Profit & Loss Account for the

year ended 31st December 1989:

Rs. / Rs.
To Raw materials
To Direct Wages
To Productive Overheads
To Administration Overheads
To Selling and Distribution Overheads
To Preliminary Exps.
Written off
To Goodwill written off
To Dividend (net)
To income Tax
To Net Profit / 1,39,600
76,200
42,600
39,100
42,700
2,200
2,501
3,000
4,100
1,89,994 / By Sales (12,000 units)4,
By Finished Stock
(200 Units)
By Work-in-progress:
Materials 28,200
Wages 11,796
production
overheads 7,999
By Interest on Securities
(Gross) / 4,80,000
8,000
47,995
6,000
5,41,995 / 5,41,995

The company manufactures a Standard Unit, scrutiny of cost records for the same period show that:

a) Factory Overheads have been allocated to the production at 20% on Prime Cost.

b) Administration Overheads have been charged at Rs.3 per Unit on Units produced.

c) Selling & Distribution expenses have been charged at Rs.4 per Unit on units sold.

You are required to prepare a statement of cost to work out profit as per cost accounts and reconcile the same with that shown in the Financial Accounts.

LEC 8: (30 MINS)

From the following details of KT & Co. compute profit as per P & L A/c as well as, as per cost

sheet and reconcile profit between cost sheet and P & L A/c showing clearly the reasons for the

variations of the two profit figures.

Particulars / Rs.
Sales / 20,000
Purchase of material / 3,000
Closing stock of material / 500
Direct wages / 1,000
Indirect wages / 500
Indirect factory expenses / 2,000
Bad debts / 100
Interest on overdraft / 50
Profit on sale of assets / 1,000
Selling expenses / 2,000
Distribution expenses / 1,000

In cost sheet manufacturing overheads recovered at 300% of direct wages, selling overheads recovered Rs.1,500 and distribution overheads recovered Rs. 700.

LEC 9: (29 MINS)

Following is the Trading and Profit and loss Account of M/s Vishal Enterprises for the year ended 31-3-2006.

Particulars / Rs. / Particulars / Rs.
To Opening Stock
(500 units) / 17,500 / By Sales
(10250 Units) / 7,17,500
To Materials / 2,60,000 / By Closing Stock
(250 units) / 12,500
To Wages / 1,50,000
To Factory Overheads / 94,750
To Gross Profit c/fd / 2,07,750
7,30,000 / 7,30,000
To Administrative
Overheads / 1,06,000 / By Gross Profit c/d / 2,07,750
To Selling Overheads / 55,000 / By Dividend Received
on Investments / 10,250
To Loss on Revaluation of
Assets / 9,000
To Net Profit / 48,000
Total / 2,18,000 / 2,18,000

In Cost Accounts, materials charged @Rs.25/- per unit and wages @ Rs.15/- per unit. Factory overheads taken @60% of wages. Administrative overheads applied @20% of works cost. Selling overheads taken @ Rs.6 per unit sold.

You are required to prepare

(a)Statement of Cost showing total cost and cost per unit

(b)Statement of Reconciliation of Profit/Loss

LEC 10: THEORY (20 MINS)

LEC 11: (PART 1) (14 MINS)

From the accounts of ABC Co. Ltd., the Manufacturing, Trading and Profit and Loss Accounts are reproduced below:

Rs. / Rs.
To Raw Materials:
To Opening Stock
To purchases
To wages
To works Expenses / 29,500
1,86,500
2,98,000
1,90,750 / By Work in Progress:
Materials 4,000
Wages 5,500
Works Expenses 3,300
By Cost of Goods
Manufactured
By Closing stock of
Raw materials / 12,800
6,59,950
32,000
7,04,750 / 7,04,750
To Cost of Goods sold
To Administration Exp.
To Selling & Distribution
Expenses
To Bad Debts written off
To Net Profit transfer
to Appropriation A/c / 6,59,950
1,22,500
1,64,000
17,500
72,450 / By Sales (7,600 Units)
By Finished Stocks
(1,400 units)
By Interest on Investments / 9,12,000
1,17,600
6,800
10,36,400 / 10,36,400

The following information is also available:

a) Accrued wages of Rs.17,000 included in wages

b) Works expenses are allocated to production at 60% of direct labour cost

c) Administrative expenses are allocated at Rs.12 per unit of Production

d) Selling and distribution expenses are allocated so as to work out to 20% of selling price.

Prepare Costing Profit and Loss Account and a statement of Reconciliation between the two accounts.

LEC 12: (PART 2) (CONTINUE SOLUTION OF LEC 11) (38 MINS)

LEC 13: (38 MINS)

Following is the Trading and Profit and Loss account of a Manufacturer specialist in Producing a

Product.

Trading Profit and Loss account

Particulars / Amount / Particulars / Amount
To Materials
To Wages
To Factory Expenses
To Gross Profit c/d / 2,91,500
1,86,100
1,40,550
2,05,275 / By Sales
By Stock of
By Work In Progress
Material 28,000
Wages 15,600
Factory exp. 11,700 / 7,50,000
18,125
55,300
8,23,425
To Administration expenses
To Net Profit / 1,36,500
68,775 / By Gross Profit / 2,05,275
2,05,275 / 2,05,275

1,550 Patented articles were produced and 1,500 were sold during the year. The costing records showed that factory expenses worked out at Rs 82.50 and administrative expenses at Rs 90.625 Per article produced. The cost accounts show a profit of Rs 70,312.50 for the year.

Prepare costing Profit and loss account and a statement profit as per cost records and financial records.

LEC 14: (39 MINS)

The Following is the summary of trading and profit and loss account for the year ended 30th

June 1994.

To Stock of finished goods
To Purchases 2,05,000
Less Returns 2,500
To Wages
To Factory expenses
To Depreciation on plant
To Gross Profit c/d / 7,500
2,02,500
63,750
15,750
18,300
1,77,450 / By sales
By Stock
of finished
goods / 4,72,500
12,750
4,85,250 / 4,85,250
To office Expenses
To Selling and distribution
To Provision for bad debts
To Interest on Bank overdraft
To Loss on sale of Investment
To Good will written off
To Net Profit / 32,685
51,330
2,000
705
1,500
4,000
90,855 / By Gross Profit
By Profit on sale
of Land
By Interest on
Investment / 1,77,450
3,750
1,875
1,83,075 / 1,83,075

Stock Valuation is financial accounts is done as under

Opening / Closing
Material
Labour
Overheads / 4,050
2,250
1,200 / 6,900
3,600
2,250
7,500 / 12,750

In cost accounts

a) Recovery rates were Factory on cost @ 5% of Sales; Selling and distribution on cost @ 12% of Sales; Office overheads Rs 28,000

b) Stock is valued at Prime cost only

c) Non Cost items should strictly be excluded

Ascertain Profit shown by cost accounts and reconcile the profit as per cost records with that as per financial records.

LEC 15: (45 MINS)

Ethusiasts Ltd. Commenced business on 1st April, 1996. Cost and Financial records are

maintained for the year ended 31st March, 1997. From the following information’s prepare

statements:

(a) Showing the result as per costing records, (b) Showing result as per financial records and (c)

Reconciling these results

Particulars / As per costing
Records / As per Financial
Records
Material consumed
(20,000 kgs.)
Direct Wages
(3000 man days)
Factory Overheads
Administrative Overhead
Sales overheads
Stock (of output produced)
As on 31-03-97 2,000 kgs.
Work in Process as on
31-03-1997
Sales (16,000 kgs)
Rent Income
Preliminary expenses Written off / Rs.28.50 per Kg.
Rs.80 per man day
20% of the Prime
Cost
Rs.30 per Kg. of
Output produced
Rs.50 per Kg. of
Output sold
At cost of production
Rs.1,62,000
Rs.130 per Kg.
---
--- / Rs.26 per Kg.
Rs.85 per man day
Rs.3,60,000
Rs.4,00,000
Rs.9,60,000
Rs.1,50,000
Rs.1,62,000
Rs.129.50 per Kg.
Rs.1,20,000
Rs.30,000

LEC 16: (46 MINS)

Following information has been extracted from the financial records of ‘X’ Ltd. for the year ended 31st March, 1993:

Rs.
Opening Stock of Raw material as on 1-4-92
Raw Material Purchased during the year
Stock of Raw Material as on 31-3-93
Wages paid during the year
Work expenses
Office and Administration expenses
Selling and Distribution expenses
Work in progress as on 31-3-93:
Material5,000
Wages3,000
Works overheads1,900
Stock of Finished Goods as on 31.3.93 (500 units)
Sales (8000 units)
Interest and Dividend Received
Preliminary Expenses written off / 20,000
1,60,000
30,000
80,000
55,000
35,000
45,600
9,900
19,000
4,00,000
1,600
4,500

On going through the costing records, you discover that:

a)The factory expenses have been allocated to the production at 25% on prime cost.

b)Office and Administrative expenses had been charged at Rs.4/- per unit produced.

c)Selling and Distribution expenses have been charged at Rs.5/- per unit sold.

You are required to prepare:

i)Trading and Profit and Loss Account as per financial records for the year ended 31st March 1993.

ii)A statement showing costing Profit and Loss of the company for the same period.

Reconcile the profits as shown by the financial accounts and as disclosed by cost accounts.

LEC 17: (38 MINS)

The following are available from financial accounts for the year ended 31st March, 1994:

Rs.
Direct materials consumption
Direct wages
Factory overheads
Administration overheads
Selling and distribution overheads
Bad debts
Preliminary expenses (written off)
Legal charges
Dividend received
Interest on deposit received
Sales 1,20,000 units
Closing stock:
Finished stock 40,000 units
Work in progress / 2,50,000
1,00,000
3,80,000
2,50,000
4,80,000
20,000
10,000
5,000
50,000
10,000
7,00,000
1,20,000
80,000

The cost accounts reveal:

Direct materials consumption Rs.2,80,000

Factory overhead recovered at 20% on prime cost.

Administration overhead at Rs.3 per unit of production.

Selling and distribution overhead at Rs.4 per unit sold.

Prepare:

(1)Costing profit and loss account.

(2)Financial profit and loss account.

(3)Statement reconciling the profit disclosed by the costing profit and loss accounts and financial profit and loss account.