per cost accounts for that period was Rs. 388600 on reconciliation The following differences were noticed a) The following items were included in the Financial books: a. Director fees (Dr) 6500 b. Bank interest (Cr) 300 C. Incometax(Dr) 83000 b) Bad and doubtful debts for Rs.5700 were written off in financial books. c) Overhead in cost accounts absorbed were Rs. 85000 with the actual were Rs.83200 d) A net loss of Rs.10,000 on sale of old machinery was dealt with in the Financial books. Reconcile the profits between the cost and financial accounts. 530 388600 Profit as per cost Accounts Add: Income credited in financial A/c's: Bank interest Overabsorption of overhead in cost accounts (85000 83200) 300 1800 2100 390700 Less: Expenses and loss in Financial books Director fee Income tax Bad and doudful debts Loss on sale of machinery Profit as per Financial Accounts 6500 83000 5700 10000 105200 285500 Problem: The Net profit of a Manufacturing Co., Ltd. appeared of Rs.64377 as per financial Records for the year ended 31st March 2003. The cost books however showed a net profit of Rs. 86,200 for the same period. Prepare a reconciliation statement from the following information. Works overhead under recovered in costs 1560 Administrative overhead over-recovered in costs 850 Depreciation charged in financial Accounts 5600 Depreciation recovered in costs Interest on investments not included in costs 4000 Loss due to obsolescence charged in financial A/Cs 2850 Income tax provided in Financial A/Cs 20150 Bank Interest credited in Financial A/Cs Stores Adjustments (credit) in Financial books 237 Loss due to depreciation in Stock values charged in Financial a/cs 3375 6250 375