Dept. Y 8,000 Cr. Dept. Z 18,000 54,000 95,000 Dr. Particulars To Balance b/d (Mark-down opening stock) To Memorandum Stock A/C (mark up on transfer) To Memorandum Stock A/C (Mark-down) To Memorandum Stock Alc (mark down on goods destroyed) To Gross profit (balancing figure) To Balance old (Mark-down dosing stock) Memorandum Mark Up Account Dept. Y Dept. Z Particulars 510 - By Balance b/d (Mark-up on opening stock) 900 -By Memorandum Stock A/c (Mark up on purchase) 800 4,100 By Memorandum Stock A/C (Mark up on transfer) 80 -By Memorandum Stock Alc (marked down on goods lying in stock) 51,518 92,496 8,192 18,098 62,000 1.14,694 1,350 344 62.000 1,14,694 Working Notes: (1) Ascertainment of Closing Stock at Cost Particulars Dept. Y Closing stock at Invoice price (from Memorandum Stock Account) 32,770 Closing Stock at cost 3/4 of 32,770 = 24,578 Loading on closing stock 1/3 of 24,578 = 8,192 (2) Ascertainment of Mark-down in Closing Stock of Dept. Z (Mark down) x Value of closing stock = 4,100 X 2,300 - 344 (Value after down) 27.400 "Value after mark-down = 21,000 + 50% of 21,000 - 34,100 = 27,400. Dept. Z 354 294 2/3 of 54,294 = 36,196 1/2 of 36,196 = 18,098 (3) Verification of Gross Profit Sales Add: Mark down 510 + 3800) / 4,100-3344) Dept. Y 2,10,000 1,310 2,11,310 52,828 1,310 51,518 Dept. Z 2,85,000 3,756 2.88.756 96.252 3,756 92,496 Gross profit (Dept Y 14 and Dept Z 1/3) Less: Mark down Gross Profit as per Memorandum Mark up Account Illustration 25 M's Bright & Co., had found departments A,B,C and D, each department being managed by a departmental manager whose commission was 10% of the respective departmental profit, subject to a minimum of 6,000 in each case. Inter-depart- mental transfers took place at a "loaded' price as follows: From Department A to Department B: 10% above cost; From Department A to Department D: 20% above cost From Department C to Department D: 20% above cost: From Department C to Department B: 20% above cost c28 For the year ended 31st March 2018, the firm had already prepared and closed the Deparmental Trading and Profit and Loss Account. Subsequently it was discovered that the closing stock of departments had included inter-departmentally transferred goods at loaded price instead of cost price. From the following information, prepare a statement re-computing the departmental profit or loss: (all figures in ). Particulars Dept A Dept B Dept C Dept D Final Profit / Loss 38,000 (Loss) 50,400 (profit) 72,000 (profit) 1,08,000 (profit) Inter-departmental transfers included at 70,000 (22,000 from Dept A and 4,800 (3,600 from Dept C loaded price in the departmental stock 48,000 from Dept C) and 1,200 from Dept A)