H20

A B C D E F G H

4 Illustration 1:

information is available from Cost

and Financial
The following
Co. Ltd. for the year ender 31
tsin respect of On Going
to prepare a statement reconciling
December, 2019. You are required shown in
s a m e . The following
items are
the profit or loss from the
Financial Accounts but not
in Cost Accounts.
5
Loss by fire Rs.1,050
6
Reductionin value of stock Rs. 8,000
Debenture interest Rs. 6,000
8
Received Rs. 1,225
Bank interest
9
i n v e s t m e n t s Rs. 6,000
Interest on
10 3,700
obsolescence of machinery Rs.
Loss due to
11
for shop Rs. 2,000
Rent received
12 Rs. 38,000
income-tax
Provision for
information is as follows:
13
14 Theadditional estimated at R26,000,
overheads are
Accounts,
works
(a) In Cost at R29,120.
Financial Accounts they a r e charged
while in
estimated at
overheads are
15 administration

In Cost
Accounts, debited at R18,300.
(b) financial
accounts they a r e
while in
R20,000,
depreciation is R1,300
16
excess charge for
In Cost A c c o u n t s ,
(c) Accounts.
Financial
with the
compared to does not agree
Accounts
17 Financial
is
Profit as
shown by Cost
Accounts

Profit as per
(d) Accounts.

profit
shown by Cost
R1,92,400.
18
19
20
21
Q.2 SOL22
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22
SOL 1 FINSOL1
23
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 H22
A B C D E F

1 ON GOING C0. LTD.

2 Statement of Reconciliation Between Costing Profit and Financial Profit for the year ended 31st December, 2019

4
Particulars
5 COSTING PROFIT 1,92,4000
6
Add:
7 1. ncome Creditedin Financial A/cs only
8 -Interest on lnvestments 6,000
-Bank Interest 1.225
10 -Rent Received 2,000
11 2. Depreciation Undercharged in Financial A/cs 1,300
12 (i.e. overcharged in Cost A/cs)
13 3. Overheads Over recovered in Cost A/cs
14 -Administration Overheads Z20,000 - 18,300)
1,700 12,225
15
2,04,625|
16 Less:
17
1. Expenses/Losses/Appropriations Debited in Financial A/cs Only
18 -Loss due to obsolescence ofmachinery 3,700
19
-Provision for Income Tax 38,000
20 -Reduction in Value of stock 8,000
-Debenture Interest
6,000
-Loss by Fire 1,050
23 2. Overheads Under ecoveredin Cost A/cs
24
-Works Overheads 29,120 -R26,000) 3,120 59,870
25 FINANCIAL PROFIT
26
1,44,755
27
28
29

Sheet1Q1 sOL 1 FIN SOL 1 Q2 SOL 2 FIN SOL 2 Q.3 Sheet2 Sol .

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R24

A B
C D E
F G H LI
2 Q.2

Shree Ram Co. Ltd's Trading and Profit and Loss Account is as follows:
Particulars Amt
5 Particulars Amt
Purchas 38,000 Sales 30,000 Units
6
Less: Closing Stock 1,20,000
4,020 33,980 4 each
Wages [Direct] 16,000 Profit on Sale of ASsets
8
Works Expenses 4,000
9
18,195
Selling Expenses 11,000
Administration 9,010
10 Expenses
11
Depreciation 1,650
12 Net Profit
13
34,165
1,24,000 1,24,000
The Profit as per Cost Accounts was 40,220. Prepare Reconciliation Statement to
14 reconcile Cost Profit with Financial Profits.
15

16 Furtherinformation as per Cost Accounts:

17
18 (a) Closing Stock was taken at R6,420.
19 (b) The Works Expenses were taken at 100% of Direct Wages.
(c) Selling and Administration Expenses were charged at 10% of sales and at 0.10
20 per unit respectively
21 (d) Depreciation was taken atR1,200

22
23
24
25
F17

A B
1 SHREE RAM CO. LTD.
C D
E F G

2 Statement of Reconciliation Between Financial Profit and

3
Costing Profit

PARTICULARS
FINANCIAL PROFIT 34,165
Add:
1. Closing Stock Undervalued in Financial A/cs
8 2400
R6,420- R4.020)
9 2. Depreciation Overcharged in Financial A/cs 450
10
R1,650 -Z1,200)
11 3. Overheads Under recovered in Cost A/cs
12
-Works Expenses ( 18,195 -R16,000)
13
-Administration Expenses(79,010-R3,000) 2,195
14 6,010 11.055
15
Less: 45,220
16
Income Credited in Financial A/cs only
17
-Profit on Sale of Assets
18
2. Overheads Over recovered in Cost A/cs 4,000
19
-Selling Expenses12,000 -311,000)
20
COSTING PROFIT 1000 5,000
21 40,220
22

23
24
25
26
27
28
29
30.

Q2 2 FIN SOL 2 Q3 Sheet2

Solution 3 Q4 Solution 4 Q.5 .. :
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 A B C D E
1
2

3
4
From the
following particulars
of Jay Ltd. Co. required
you are

Q.3 to prepare Reconciliation Statement and ascertain

Costing
5 Profit/Loss.
6
*
Net Profit per financial P &
as
LA/c. is Rs. 60,000.
Opening Stock was overvalued by Rs. 3,000 in Cost Accounts
8 as compared to financial accounts.

* Administrative overheads charged in Financial Books Rs,

9 30,000 but recovered in Cost Rs.50,000.
10 *Interest Received Rs. 10,000
11 *Income Tax Provision Rs. 1,200
12 *Notional Salary to Proprietor in Cost Rs. 30,000
Closing Stock as per financial books Rs. 18,200,
13 Whereas in Cost books it was Rs. 20,000.
14
15
16
17
18

Q2SOL 2 FIN SOL 2 Q.3

Sheet2Solution 3 4 Solution 4 Q.5
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 E17

A B
1 Jay Ltd. Co. C D E
2
Statement of Reconciliation Between Financial Profit
and Costing Profit
3
4 PARTICULARS
5 FINANCIAIL PROF
6 Add: 60,000
7
1. Expenses/Losses/Appropriations Debited in Financial A/cs Only
8 -

Income Tax Provision

9 2. 1,200
Closing Stock Undervalued in Financial A/ces
10
11
R20,000-718,200)
1,800
12
13 Less:
3,000
14 63,000|
1. Opening Stock was overvalued in Cost A/cs
15 2. Administrative over recovered in Cost A/cs 3,000
16 3. Cost recovered in Cost
A/cs Only 20,000|
17 -

Notional Salary to
18 4. Income Credited
Proprietor
19 -
in Financial A/cs
Interest Received only 30,000
20
21 COSTING PROFIT 10,000| 63,000|
23 NIL
24

26
27

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 A B
C D E F
G
A Dream
H
World's Trading and
Profit and Loss Account was as following:
Particulars Amt
Particulars Amt (a) Statement of Cost and Profit/Loss
To Opening Stock 2,00,000|By Sales
To Purchases 3,00,000 Particulars
90,000 By Closing Stock L,60,00O Direct Materials:
To Wages 25,000 Opening Stock
To Factory Overheads 20,000 2,00,000|
Add: Purchases
To Gross Profit c/f 90,000
-
1,25,000 Less: Closing Stock
4,60,000 90,000 2,00,000|
To Admin Expenses 4,60,000 Direct Wages:
25,000
15,000 By Gross Profit 1,25,00o PRIME COST
To Sales Expenses
20,000 2,25,000
Factory Overheads
To Net Profit
90,000 15,000
WORKS COST
L 1,25,000O 2,40,000
Costing Records show the following:
1,25,000| Admin Overheads
24,000
COST OF PRODUCTION
1. Closing balance of the stock
ledger is Rs.
2,64,000
90,000. Sales Expenses
2. Direct Labour is Rs. 25,000.
24,000
COST OF SALES
3. Factory Overheads is Rs. 15,000.
2,88,000
Costing Profit (Bal. Fig.)
12,000
4. Admin overheads and Sales expenses each calculated at 8 % of the SALES
are 3,00,000
selling price.
Prepare Costing Profit and Loss Account and the statement of reconciliation
between the profit and loss as per the two accounts.

.Solution 3Q.4 Solution 4 Q.5 Sheet3 Q.6Solution 6 Q.7 Solution

y Average: 27666.66667 Count:3 Sum:8
 R31

A
1 Dream World C D|E
(a) Statement of Cost and Profit/Loss

Particulars
5 Direct Materials:
LOpening Stock 2,00,000
7 Add: Purchases 0,000
8 Less: Closing Stock
90,000 2,00.000
9
Direct Wages:
25,000
PRIME COST
2,25,000
12
Factory Overheads
13
WORKS COST 15.000
4 2,40,000
15 Admin Overheads
16
COST OF PRODUCTION 24.000
2,64,000
18 Sales Expenses
19 COST OF SALES 4.000
20 2,88,000
21 Costing Profit (Bal. Fig.)_
22 2,000
23 SALES
24 3,00,0000
25
26 Statement of Reconciliation Between Financial Profit and Costing Profit
27

28 PARTICULARS
29 FINANCIAL PROFIT 90.000
30 Add:
. Overheads Under recovered in Cost A/cs
- Factory Overheads (R20.000-15,000))
5,000
33
34 95,000
35 Less:
36 1. Closing Stock Overvalued in Financial Acs
70,000|
37 R160,000- 390.000)
38
2. Overheads Over recovered in Cost A/cs
39 - Administration Expenses (24,000-15,000) 9,000|
40
Selling Expenses (324.000-20,000) 4.000 83.000
41 COSTING PROFIT 12,000
42
43

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 13

A B
2 C D E
F G

From the following details of SR & Co.

compute profit as per Profít & Loss A/c as well as, as per
Q.5 cost sheet and reconcile
profit between cost sheet and Profit & Loss A/c showing clearly the reasons
for variation of the two profít
figures.

Particulars Amt
6 Purchases 6,000
Closing Stock 1,000
8 Sales 40,000
9 Direct Wages 2,000
10 Indirect Wages 1,000
11 Indirect Factory Expenses 4,000
12 Bad Debts 200
13 Interest on Overdraft 100
14 Profit on sale of Assets 2,000
15 Selling Expenses 4,000
16 Distribution Expenses 2,000
17
In cost sheet manufacturing overheads are recovered at 300% of direct wages, selling overheads at
Rs. 3,000 and distribution overheads at Rs. 1,400.

18

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L23

D H
M N
PROFIT AND LOSS ACCOUNT COST SHEET
PARTICULARS AMT PARTICULARS AMT
RECONCILIATION STATEMENT
PARTICULARS AMOUNTAMOUNT PARTICULARS AMOUNT
D DIRECT coST PROFIT AS PER P& LA/NC 23700
BY SALES 40,000
TO PURCHASES 6,000
A) RAW MATERIALS ADD BAD DEBTS 200
TO DIRECT WAGES OFIT ON SALE OF ASSETS
PURCHASES 6,000| INT ON OVERDRAFTS 100
2,000 LESS CLOSING STOCK 1,000 5,000 SELLING EXP
TO INDIRECT WAGES 1,000 BY CLOSING STOCK 1,000 B) DIRECT WAGES 2,000 DISTRIBUTION EXP 600
TO INDIRECT FACTORY OH 4,000 PRIME COST 7,000
TOBAD DEBTS 200
25600
TOINTEREST ON OVERDRAFT 100| I) INDIRECT COST_
TO SELLING EXP 4,000 A) FACTORY OHS (300% OF DW) 6,000 LESs DIFF IN FACTORY OHS (6000-5000) 1000
TO DISTRIBUTION EXP 2,000 WORK COST /COP 13,000 PROFIT ON SALE OF ASSETS -2000
B) SELLING &DISTRIBUTION OHS
TO NET PROFIT 23,7/00 SELLING OHS 3,000 PROFIT AS PER COSTSHEET 22600|
DISTRIBUTION OHS 1,400 4,400
COST OFSALES 17,400
43,000| 43,000 ADD PROFIT 22,600

SALES 40,000

Solution 4 Q5Sheet3 Q6 Solution 6 Q.7 Solution

Solution 3 Q4
dy
FN x
 A B C D E F G

4 Q.6 Details of Income and Expenses of Suraj Ltd. for theyear ended 31-12-2019 wasas under.
5 Particulars RSRS Particulars RS
6 To Dcbenture Discount 600 By Gross Profit 57,000|
To Depreciation on Machinery 1,800By Dividend 4,300
8 To Depreciation on Building 2,300 By Interest on Deposit 3,600
9 To Admin Expenses 39,200|By Net Loss 4,450
10 To Loss on Sale of Machinery 1,250|
11 To Preliminary Expenses 1200
12 To Selling Expenses 23,000
13 69,350 69,350
14
As compared to Cost Accounts, Admin indirect expenses are 12% more in Financial accounts
15 while Selling indirect expenses are 8% less.
Depreciation on machinery was over-estimated by 350, while depreciation on building was
16 under estimated by R150.

Prepare (1) Statement of Cost and Profit/L0ss and (2) Statement showing reconciliation of profit
17 or loss of Cost Accounts with that of Financial Accounts.
18
19
20
21

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Senses
 F2 x
A B C D E G
Suraj Ltd.

(a) Statement of Cost and Profit/Loss

Particulars RS RS
GROSS PROFIT 57,000
6 LESS
DEP ON MACHINERY (1800350) 2,150
8 DEP ON BUILDINGC 2,150
ADMIN EXP (39200/112 * 100) 35,000|
10 SELLING EXP (23000 *100/92) 25,000| -64300
11
12 LOSS AS PER COST SHEET -7300
14
15 b) Statement of Reconciliation Between Financial Loss and Costing
16
Particulars RS RS
17 NET LOSS AS PER P&L
18 ADD: 4,450
19 Debenture Discount
600
20 Loss on Sale of Machinery
21 Preliminary EXpenses
1,250
1,200
22 DEP ON BULDG
150
23 ADMIN
24 4,200 7.400
25
26 2,950
27 LESS:
28 Dividend
4,300|
29 Interest on Deposit 3,600
30 DEP ON MACHINERY
31 350
SELLINGEXP 2,000 -10,250
32
33 LOSS AS PER COST SHEET
34 7.300
35

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 K7

A B C D E F G

From the following, prepare a statement of reconciliation and find-out

Q.7
profit/loss of M/s Raymond Lid., as per financial records.
5
6

1 Particulars Amount
8 Net loss as per cost records 3,44,800
9 |Works overhead under recovered in costing
6,240
10 | Administrative overheads over-recovered in costing 3,400
11 Depreciation in Financial A/c 22,400
12 Depreciation in Cost A/c 25,000
13 Interest received 17,500
14 Obsolescence Loss in Financial A/c 11,400
15 Provision for Income Tax 80,600
16 Opening Stock:
17 - Financial Records 1,05,200
18 - Cost Records
1,08,000
19 Closing Stock:
20 - Financial Records 1,04,000|
21 Cost Records
99,200
22 Interest Charges in Cost Accounts only 12,000
23 Preliminary Expenses w/off 1,900|
24
25
26-

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K14

A B
C D E H K L
M/s Raymond Ltd.

(b) Statement of Reconciliation between Financial Loss andCosting

Particulars RS RS
COSTING LOSS -3,44.800|
6
Add:
7 1. Income credited in iinanciai cs
8 Interest Received 17,500
9 2. Closing Stock Overvalued in Financial A/es 4,800
10 3.Opening Stock Undervalued in Financial A/cs 2,800
2.600
11 4. Depreciation Under Chargedin Financial A/cs
5. Overheads Over-recovered in Cost A/cs
12
Administrative Overheads 3,400
13
6. Exenses Debited only in Cost A/cs
14 43,100
Interest Charges 12,000
15
16
-3,01,700
17 |LESS:
18 . Expenses/Losses/Appropriations Debited in Financial A/cs only
Obsolescence Loss 11,400|
19
Provision for Income Tax 80,600
20
1,900
Preliminary Expenses written off
2. Overheads Under recovered in Cost A/cs 6,240 1,00,140
Works Overheads
23 -4,01,840
Financial Loss

27
28
29

30
31
32
33
Solution 7 Q.8 Sheet5 Solution 8 Q . 9 . .
34
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 Q30

A B C D F G H L M N

4 .
Following is the Profitand Loss Account ofM/s. Aniruddh Industries Ltd. for the year ended 31 December,2018
Particulars RS RS Particulars RS RS

6 To Opening stock of By Sales 9.50.00|

7 Raw Materials 70,000| By Closing Stock:
8 Work in Process 40,000| Raw Materials 70,000
Finished Goods 90,000 2,00,000 Work in Process_ 40,000
10 To Purchases 2.60.000 Finished goods 40,000 1,50,000O
11 To Factory Wages 55.000
12 To Electricity Charges 60,000
To Factory Overheads 1,00,000

13
14 To Gross Profit c/d 4,25.000
15 11,00,000 1,00,000
16
17 To Administrative Expenses_ 35.000 By Gross Profit b/d 4,25.000
18 To Selling and Distribution Expenses 1,20,000 By Miscellaneous Income 40,000
19 To Bad debts 45.000
20 To Net Profit 2.65.000
21 Total 4,65,000Total 4,65,000
22
Their Cost Account showed a profit of R 2,70,500. On scrutiny of their Costing Profit and Loss Account, it was found that
24 (1) Their Opening Stocks and Closing Stocks were valued as under:
Opening stock of Closing stock of

26 Raw materials 80,500 Raw Maternals 71.000

27 Work in Process 41,000 Work in Process 245,000
Finished Goods 60,9000 Finished Goods 30,000
(2) They charged administrative expenses at 21,000 and Selling and distribution expenses at 1,25,000.
29
1
(3) They had charged depreciation @ 25% on Written down valhue method on its machinery which was purchased on July 2015 for R80,000. In
Financial accounts, however, the depreciation was provided on Straight Line Method and the same was inchuded in the Factory overheads of
1,00,000.
30 (4) Prepare a statement reconcilng the difference in the profits as disclosed by the two recods
31
32
33

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 F52

M/S ANIRUDDH INDUSTRIES LTD. C D E

Statement of Reconciliation for the Year Ending 31-12-2018

Particulars_ RS RS
FINANCAL PROFIIT 2.65.000
Add:
1. Bad debts w/off only in F.A. 45.000
Openng stock overvalued in F.A.
Finished goods(90.000 - 60 900)
29,100
3. Closing stock undervalucd in.
10 -Raw matenals (71,000-70,0000) 1,000|
11 -Work-in-process (45.000 -40,000) 5,000
12 4. Depreciation overcharged in F.A. (20,000 -9,844) (WN 1 & 2) 10,156
13 S. Overhcads nder recovered in C.A.
Administrative expenses (35,000 21,000) 14,000 1.04,256
15 3,69,256
16 LESS:
17 1. Misc. Income credited only in FA. 40,000
18 2. Closing Stock overvalued n F.A.
19 -Finished goods (40,000-30,000) 10,000L
20 3. Opening Stocks undervalued in F.A.
21 -Raw Materials(80,500-70,000) 10,500
22 -Work-in-Process (41,000-40,000) 1,000|
23 4. Selling & Distr. Exp. Over-recovered in C.A. (1,25,000-1,20,000) 5,000|
24 5. Factory Overheads [1.12,256-(1,00.000-20,000)1(WN 3) 32,256 -98,756
25
COSTING PROFIT 2,70,500
26
27 Notes:
(1) Depreciation as per P & L Ac: 80,000 x 25%=20,000 20000
29 2) Depreciation as per Cost Accounts (C.A.):
0 01-07-2015 Machine Pwchased 80,000
31-12-2015 Depreciatiou 25% (for 6 months) 10,000
32 01-01-201l6 W.D.V. 70,000
31-12-2016
33
01-01-2017
Depreciation @ 25% 17,500
.D.V. 52,50500
31-12-2017 Depreciation25% 13,125
36 01-01-2018 .D.V. 39,375
37 31-12-2018 Depreciation 25° 9,844
38
39 3) Ifwe prepare Costing P & L A/c, the balancing ligure will be presumed to be
40 Particulars Amt
41 Purchases 2,60,000

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 26
27 Notes:
() Depreciation as per P& L A/c: 80,000 x 25% = 20,000
20000
29 ) Depreciation as per Cost Accounts (C.A.):
01-07-2015 Machine Purchased 80 000
31-12-2015
Depreciation 25% (for 6 months) 10,000
01-01-2016 W.D.V 70,000
31-12-2016
Depreciation 25% 17,500
34 01-01-2017 W.D.V. 523500
35 31-12-2017 Depreciation @ 25% 13.125
6 01-01-2018 W.D.V. 39,375
37 31-12-2018
Depreciat1ion 25% 9,844
8

9 (3) If we prepare Costing P & L A/c, the balancing figure will be presumed to be
Particulars Amt
41 PurchasesS
2,60,000
42 Op St. RM
,500
43 Op St. WIP
,000
44 Op St. FG
60,900
Factory Wages 55,0
46 Electricity Chgs 60,000
47 Admin Chgs
21,000
48 S &D Chgs 1,25,000
49 Depn 9,844
50 Less: Cl St RM
71,000
51 Less: CI St WIP -45,0
52 Less: CI St F6
-30,0
53 Less: Sales
-9,50,000
Add: Pft ,70,5500
Factory O/h (Bal. Fig.) -1,12,256
56
57 |Less:Factory O/h as per Financial P &L (100000-20000 Depn)
80,0
58 Factory O/h over recorded in Cost records 32,256
59
60
61
62
63
64

65
66
aL

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L13

A B D E F G H K L M N O P

CoST FIN
4 st of reconcilations AMT AMT
wn 1 dep @WDV @SLM
PROFIT AS PER P&L AC
purchased 1/7/15 80000 80000
7 ADD OP STOCK FG
2,65,000 ECS DFD @25%, 6M)
10000 10000
29,100 WDV i/1/2016 70000 70000
8 CL STOCK OF RM 1, LESS DEP @25% 17500 20000
9 CL STOCK WIP 5,000 wDV1/1/17 52500 50000
10 ADMIN EXP 14,000 1312520000
DEP@25%
11 EXCESS DEP CHARGED IN FACT 10,156 WDV 1/1/18 39375 30000
12 BAD DEBT 45,000 1,04,256 DEP FOR 2018@25% 9844 20000 ExCESs DEP IN FIN 10156
13
14
3,69,256
-
15 COST SHEET

16 OP STOCK ALL 182400

17 260000
PUR
18 55000
FAC WAGES
9 LESS OP STOCK RM 10,500
ELEC CHARGES 60000
20 OP STOCK WIP 1,000
DEP INN COST 9844
21 CL STOCK OF FG 10,000
ADMIN 21000
selling exp 5,000
22 SELLING 125000
23 MISL INCOME 40,000
FACT OHS 32,256 -98,756
24
LESS
25 CL STOCK 146000
PROFIT AS PER COST SHEET 2,70,500
26 SALES 950000
ADD PROFIT 270500

FACT OHs (BAL FIG) -112256

29
30 FACT OHS (100000-20o 80000
FO RECOVERED IN COST 32256
31

33
34
35
36

38
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H16

A B C D E F
4 Enthusiasts Itd. commenced business on 1" April, 2007.
5 Q.9 Cost and financial records are maintained for the year ended 31 March, 2008.
6 From the following informations prepares:
a. A statement showing the result as per costing records.
8 b. A statement showigiesult as per financial records and
9 C. A statement reconciling theses results.
Particulars As per costing records As per financial records
10
11 Material consumed [20,000 kgs.] Rs. 28.50 per kg. Rs. 26 per kg_
Direct wages 3,000 man days Rs. 80 per man day Rs. 85 per man day
12
13 Factory overheads 20% of the prime cost Rs. 3,60,000
|Administrative overheads Rs. 30 per kg of output Rs. 4,00,000
14 produced
15 Sales overheads Rs. 50 per kg. of output sold Rs. 9,60,000
Stock [of output produced] as on 31.03.2008:At cost of production Rs. 1,50,0oo
16 2,000 kgs.
17 in progress as on 31.3.2008 Rs. 1,62,000 Rs. 1,62,000
Work
Rs. 130 per kg._ Rs. 129.50 per kg
18 Sales 16,000kgs]
19 Rent income Rs. 1,20,000
written off Rs. 30,000
20 Preliminary expenses
21
22

23 Q8Sheet5Solution 8 Q.9 Sheet4Q.10 Sheet6

.Q.7 Solution 7
Peady
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A
B D
F G
K L M N 0 P 0 R
P&L ACCOUNT FOR THE YEAR ENDED
31/3/2008
COST SHEET (UP =18000, US= 16000)
PARTICULARS AMT PARTICULARS AMT PARTICULARS AMT CPU
TO MATERIALS (20000*26) 5,20,000
DRM (20000 28.50) 5,70,000 31.6667
TOWAGES (3000 85) WAGES 2,40,000 13.3333
2,55,00 STOCK FG
1,50,000 PRIME COST ,10,000 45
TO FAC OHS 3,60,000 BY CLOSINGSTOCK OFWIP 1,62,000
TO ADMN OHS FACT OHS(810000 206) 1,62,000
4,00,000| LESS CL STOCK WIP -1,62,000
TO SALES OHS 9,60,000BY SALES(16000 129.50 20,72,000 wORK COST
TO PRELIM EXP 8,10,000 45
30,000 BY RENT 1,20,000 ADMIN OHS (18000*30) 5,40,000
COP 13,50,000
BY NET LOSS
LESS CLOS STOCK OF FG (2000 75) -1,50,000
21,000 coGs 12,00,000
| 25,25,00o
SELLING OHS(16000*50) 800,000
25,25,00o COST OFSALES 20,00,000
ADD PROFIT 80,000
SALES (16000130) I 20,80,000 130

RECONCILIATION

PARTICULARS AMT AMT

NET LOSS AS PER P&L 1,000|

ADD
WAGES 15,000
FACTORY OHS 1,98,000
SELLING OHS 1,60,000
PREL EXP 30,000
SALES 8,000 4,11,000
3,90,000

LESS:
MATERIALS 50,000
ADMIN 1,40,000
RENT 1,20,000-3,10,000|
PROFIT AS PER COST SHEET 80,000

Solution 8 Q.9 Sheet4 Q.10 Sheet6

Q.7 Solution 7 Q. 8 Sheet5
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Senses
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H17
A B D E F |GLH K_ M N O P
The net profit of a company amounted to Rs. 60,412 for the year ending
31 R
December, 2007 as per its financial records. The cost records, however, revealed
a different
figure. A scrutiny of the two sets of accounts disclosed the following
facts:
Q 10
a. Works overheads recovered in cost accounts
during the period amounted to
Rs. 28,450 while the actual amount of these expenses was Rs. 21,390
only.

b. Actual office expenses for the

period were Rs. 19,850 whereas the office
Overhead recovered in cost acco unted to Rs. 14,500.

C. The annual rental value of

premises owned by the company, amounting to Rs.
10,800was charged in cost accounts, but not recorded in financial books.
6

d. Selling and distribution expenses for the

period amounting to Rs. 16,490 were
excluded from costing records.

e. Expenses not included in cost accounts & shown in financial accounts:

9 Interest on bank loan

1,600
10 Bank charges 160
Directors fees
750
2 Penalty due to late completion of contract 2,500
13
14
Gains duringthe year notincluded in cost accounts:
15 Transfer fees 45
16 Profit on sale of investment 4,250
Interest on investments 9,450
8.Thefollowing appropriations had been made while arriving at the profit
figure of Rs. 60,412, given below:
19
20 Transfer to dividend equalization fund 10,500
21 Transfer to income tax reserve 6,400
22 Transfer to debenture redemption fund 9,000
23
h. A sum of Rs. 10,000 given as donation to the Prime Minister Relief Fund had
been charged to profit and loss account as business expenses.
24
25 excess deprecation charged in cost RS: 2400
You are required to find out the amount of net profit / loss as per the costing

records, by preparing areconciliation statement.

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 C D E
F
H
K L
RECON. ST

Particulars RS
PROFIT AS PER P&IL 60,412|
ADD OFFICE OH OVER CHRAGED IN P&L 5350
SELLING OH 16490
Interest on bank loan 1,600
Bank charges 160
Directors fees 750
Penalty due tolate completion of contract 2,500
Transfer to dividend equalization fund 10,500
Transfer to income tax reserve 6,400
Transfer to debenture redemption fund 9,000
DONATION 10,000 62,750
123162

CHRGED IN P&L 7,060|

LESS FACT OH LESS
NOTIONAL RENT 10,800
Transfer fees 45
Profit on sale of investment
4,250
Interest on investments 9,450
-34005
2400
DEPERICIATION 89157
PROFIT AS PER COST SHEET

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