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ACC205 2022 Lecture 2 Illustration 1 This illustration shows a situation where business expenses are being contested or disputed by departments. Gaone Stores has three
ACC205 2022 Lecture 2 Illustration 1 This illustration shows a situation where business expenses are being contested or disputed by departments. Gaone Stores has three departments as follows: Gaone Stores Electronics P Opening Inventory (January 1, 2020) 4 000 Purchases 12 300 Closing Inventory (December 31, 2020) 5 000 Sales 22 000 Wages 4900 Crockery P 3 500 4 600 4 500 12 000 6 000 Clothing P 6 000 16 100 6 000 32 000 7 100 Now the following expenses were disputed and contested by departments, as result they remain unallocated. These expenses can only be allocated after negotiations. Rent Air conditioning and lighting Administration expenses General expenses 4 500 3 000 4 100 1 000 After thorough negotiations it was fully agreed to apportion rent, air conditioning and lighting according to the floor space occupied by each department. The following ratios where then 2 1 1 applied for electronics, crockery and clothing departments respectively. 52'10 The administration expenses and general expenses were allocated in the ratio of sales. Prepare Gaone's departmental Trading Profit and Loss accounts for the year ended December 31, 2020
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