Question
Subject: Accounting for Spcl.Trans. Illustration Please prepare a Departmental Trading and Profit and Loss Account & General Profit and Loss Account for the year ended
Subject: Accounting for Spcl.Trans.
Illustration Please prepare a Departmental Trading and Profit and Loss Account & General Profit and Loss Account for the year ended 31-12-2022 of M/s Gracey & Company where Department A sells goods to Department B on Normal selling price.
Particulars Dept. A. Dept. B
Opening Stocks 175,000
Purchases 4,025,000 350,000
Inter Transfer of Goods 1,225,000
Wages 75,000 280,000
Electricity Expenses 17,500 245,000
Clossing Stocks ( at cost) 875,000 315,000
Sales 4,025,000 2,625,000
Office Expenses 35,000 28,000
Combined Expenses for Both Department
Salaries (2:1 ratio) 472,500
Printing and Stationery Expenses (3:1 ratio) 157,500
Advertisement Expenses (Sales Ratio) 1,400.000
Depreciation (1:3 ratio) 21,000
M/s Gracey & Company
Departmental Trading and Profit and Loss Account
For the year ended 31-12-2022
Solution:
Particulars Dept. A. Dept. B Particulars Dept. A. Dept. B
To Opening Stocks 175,000 0 By Sales 4,025,000 2,625,000
To Purchases 4,025,000 350,000 By Transfer B 1,225,000 0
To Transfer from A 1,225,000 By Closing Stocks 875.000 315,000
To Wages 280,000
To Gross Profit c/d 175,000 1,085,000
1,750.000
Total 6,125,000 2,940,000 Total 6,125,000 2,940,000
General Profit and Loss Account
For the year ended 31-12-2022
Particulars Dept. A Particulars Dept. B
To Stock Reserve (Dept. B) 81,667.00 By Departmental net profit b/d
To Net Pkrofit c/d 376,833 Dept. A 411,757
Dept. B 46,743
458,500
Total 458,500 Total -------- 458,500
To Electricity Expenses 17,500 245,000 By Gross Profit b/d 1,750,000 1,085,000
To Office Expenses 35,000 28,000
To Salaries (2:1 ratio) 315,000 157,500
To Printing and Stationery Expenses (3:1 ratio) 118,125 39,375
To Advertisement Expenses
(Sales Ratio 40:25:26:25) 847,368 552,632
To Depreciation (1:3 ratio) 5,250 15,750
To Net Profit 411,757 46,743
Total 1,750.000 1,085,000 Total 1,750.000 1,085,000
Hi there, i want to know the explanation of the solution of the totals of the illustration problem because i have a reporting about the accounting for special transactions so i want to know every little details on how they came up in the solutions of all totals. thank you so much god bless.
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