A firm had two departments X and Y. Department Y (which was a Manufacturing Department) received goods
Question:
A firm had two departments X and Y. Department Y (which was a Manufacturing Department) received goods from Department X as its raw materials. Department X supplied the said goods to Y at cost price. From the following particulars you are required to prepare a Departmental Trading and Profit and Loss Account for the year ended on 31st December, 2014. (all figures in ~).
Particulars | Dept X | Dept Y |
Opening Stock (as on 1.1.2014) | 2,50,000 | 75,000 |
Purchases (from outside suppliers) | 10,00,000 | 20,000 |
Sales (to outside customers) | 12,00,000 | 3,00,000 |
Closing stock (as on 31.12.2014) | 1,50,000 | 50,000 |
The following information is to be taken into account:
(a) Depreciation of Buildings to be provided at 20% p.a. The value of the Building occupied by both the Departments was ~ 1,05,000 (Department X occupying two-third portion and Department Y occupying the rest).
(b) Goods transferred from Department X to Department Y ~ 2,50,000 at cost.
(c) Manufacturing Expenses amounted to ~ 10,000.
(d) Selling expenses amounted to ~ 15,000 (to be apportioned on the basis of sales of respective departments).
(e) General expenses of the business as a whole amounted to ~ 58,000.
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young