Returns Outwards 4,000 2,000 6,000

Lec 1 & 2 Theory

Lec 3Kamath is running a departmental stores having three departments. Following information is available for the year ended 31st Dec., 1993.

Dept.A Dept.B Dept.C

Purchases 40,000 60,000 1,60,000

Returns outwards 4,000 2,000 6,000

Sales 1,22,000 2,44,000 3,66,000

Return inwards 2,000 4,000 6,000

Stock ( 1-1-1993) 10,000 14,000 20,000

Stock ( 31-12-1993) 16,000 10,000 8,000

Common expenses

Wages 36,000

Telephone charges 600

Salaries 1,200

Office expense 1,800

Rent 4,800

Discount allowed 3,600

Legal expenses 4,800

Bad debts 2,600

Interest on loans 12,600

Insurance on goods 1,360

Departmental Transfers

(a) Goods transferred by Dept. A to Dept. B Rs.2,000 and to Dept. C, Rs.4,000.

(b) Goods transferred by Dept. B to Dept. C Rs.2,000 and to Dept. A Rs.1,000

(c) Goods transferred from Dept. C to Dept. A Rs.1,400 and to Dept. B Rs.1,800.

Allocation of Expenses was agreed as under

1) Telephone charges, salaries and office expenses equally.

2) Rent A-1, B-1, C-2

3) Insurance A-8, B-5 & C-4

4) Wages A-2, B-3 & C-4

5) Legal expenses are to be allocated in the ratio of sales.

6) Interest on loan is for financing department C.

Prepare departmental trading and profit and loss account for the year ended 31st Dec. 1993.

Lec 4The Trading & Profit & Loss account of Hindustan Electronics for the year ended 31st march,1992 is as follows :-

Purchases

Transistors (X) 1,60,000 Transistors (X) 1,75,000

Tape recorder (Y) 1,25,000 Tape recorder (Y) 1,40,000

Spare parts for servicing 80,000 Servicing & repairs job(Z) 35,000

and repair Stock on 31st March 19X2

Salaries and wages 48,000 Transistors (X) 60,100

Rent 10,800 Tape recorder (Y) 20,300

Sundry expenses 11,000 Spare parts for servicing 44,600

Profit 40,200 and repair job (Z)

------

4,75,000 4,75,000

======

Prepare a departmental accounts for each of the three departments X,Y and Z mentioned above after taking into consideration the following :-

(a) Transistors and tape recorders are sold at the showroom. Servicing and repairs are carried out at the workshop.

(b) Salaries and wages comprises as follows:

Showroom 3/4ths

Workshops 1/4ths

It was decided to allocate the showroom salaries and wages in the ratio 1:2 between departments X and Y.

(c) The workshop rent is Rs.500 per month. The rent of the showroom is to be divided equally between departments X and Y.

(d) Sundry expenses are to be allocated on the basis of the turnover of each department.

P5. From the following trial balance of Suburban departmental stores as on 31-3-1988, you are required to prepare Departmental Trading and Profit and loss account for the year ended on 31-3-19X8 and the Balance Sheet as on that date:-

TRIAL BALANCE

AS ON 31-3-1988

ACCOUNT DEBIT CREDIT

Opening stock :

Dept. A 40,000

Dept. B 30,000

Purchases and sales :

Dept. A 1,80,000 2,00,000

Dept. B 1,20,000 1,50,000

Wages :

Dept. A 12,000

Dept. B 3,000

Capital 2,50,000

Drawings 6,000

Debtors and Creditors 29,500 20,000

Rent and taxes 9,000

Sundry expenses 12,000

Electricity 6,000

Discounts 7,500 2,500

Advertising 15,000

Carriage inwards 6,000

Machinery 99,000

Furniture 10,000

Cash on hand and at Bank 37,500

======

6,22,500 6,22,500

======

You are given the following information:-

(1) Goods transferred at cost from Dept. A to Dept. B Rs.30,000.

(2) Depreciate furniture @ 10% and machinery @ 33.1/3% and apportion depreciation to Dept. A and Dept. B in the proportion of 2:1.

(3) Discounts are to be apportioned on the basis of departmental sales and purchases (excluding internal transfers)

(4) Closing stock:

Dept. A Rs.30,000 Dept. B Rs.20,000

(5) Carriage inwards are to be allocated in the ratio of purchases.

(6) Advertising to be apportioned equally while all other expenses are to be apportioned to Dept. A and Dept. B in the proportion of 2:1.

P8.From the following particulars, prepare a columnar form Trading and Profit and Loss Account of the three Departments X, Y and Z for the year ending 30th September, 1990.

DEPARTMENTS

Dept. X / Dept. Y / Dept. Z
Purchases
Wages
Sales
Closing Stock / Rs.
45,000
15,000
80,000
22,000 / Rs.
30,000
12,000
64,000
12,000 / Rs.
15,000
10,000
32,000
14,000

a.Rent and Taxes Rs. 7,300, Insurance Premium (Comprehensive) Rs. 4,700, Motor Van Expenses Rs. 4,400, Advertising Rs. 6,600, Travelling Expenses Rs. 3,300, Carriages on Purchases Rs. 12,000, Discount Received Rs. 3,600, bad Debts written off Rs. 550, Accounting Charges Rs. 1,750, and Audit Fees Rs. 2,400.

b.The floor area occupied by Departments X, Y and Z is in the ratio 2:2:1.

c.The closing stock of Department Y and Z includes goods worth Rs. 5,000 and Rs. 4,000 respectively purchased from Department X which sells goods at cost plus 25%.

Lec 7The following balance were extracted from the books of Mr. Harishchandra. You are required to prepare Departmental Trading and Profit and Loss account for the year ended 31st December, 1992, after adjusting the unrealized department profits, if any.

Dept. A / Dept. B
Opening Stock
Purchases
Sales / Rs.
50,000
6,50,000
10,00,000 / Rs.
40,000
9,10,000
15,00,000

General expenses incurred for both the departments were Rs. 1,25,000 and you are supplied with the following information.

(a)Closing stock of Department A is Rs. 1,00,000 INCLUDING GOODS FROM Department B for Rs. 20,000 at cost of Department A.

(b)Closing Stock of Department B is Rs. 2,00,000 including goods from departments A for Rs. 30,000 at cost to Department B.

(c)Opening sTock of Department A and Department B include goods of the value of Rs. 10,000 and Rs. 15,000 taken from Department B and Departments A respectively at cost to transferred departments.

(d)The gross profit is uniform from year to year.

Lec 8A firm has two departments – Cloth Department and Ready-made Cloths Department. The cloths are made by the firm itself out of the cloth supplied by the cloth department at its usual selling prices.

From the following figures, prepare Departmental Trading and Profit and Loss Account for the year ending on 30th June, 1983.

Cloth Dept. / Ready-made Clothes Dept.
Closing Stock
Purchases
Sales (Rs. 17,60,000)
Transfer to Ready-made Clothes Department
Manufacturing Expenses
Selling Expenses
Closing Stock / Rs.
2,40,000
16,00,000
3,60,000
2,40,000
16,000
1,60,000 / Rs.
40,000
12,000
48,000
4,800
48,000

The stocks in the Ready-made Clothes Department may be considered as consisting of 75% cloth and 25% other items. The cloth Department earned a gross profit at the rate of 15% in 1981-82. General expenses of the business as a whole amounted to Rs. 88,000.