Q.

1 On 31st March 1998, the following balances were extracted from the books of Supreme Manufacturing
company:
Dr. Cr.
Store ledger control A/C Rs. 35,000
Work in progress control A/C 38,000
Finished goods control A/C 25,000 98,000
Cost ledger control A/C 98,000 98,000

The following transaction took place in April, 1998 :

Raw Materials :

Purchased Rs. 95,000

Returned to suppliers 3,000
Issued to Production 98,000
Returned to stores 3,000

Productive wages 40,000

Indirect wages 25,000
Factory overheads expenses incurred 50,000
Administrative expenses 40,000
Cost of finished goods transferred to warehouse 2,13,000
Cost of good sold 2,10,000
Sales 3,00,000
Selling & distribution overheads 10,000

Factory overheads are applied to production at 150% of direct wages, any under/over absorbed overheads
being carried forward for the adjustment in the subsequent months. Administration and selling expenses
incurred and recovered are the same.
Show the necessary cost ledger accounts and prepare trial balance.
Q. 2. From the following data, write up various accounts as you envisage in the cost ledger and prepare a trial
balance as on 31st March 1998.
a. Balance as on 1st April 1997:
Particulars Rs.
(Thousand)
Material control 1,240
Work in progress 625
Finished goods 1,240
Production Overheads 84
Administration overheads 120 (Cr.)
Selling and distribution overheads 65
General ledger control 3,134
b. Transactions for the year ended 31st March 1998 :
Materials

Purchases 4,801
Issued to
Jobs 4,774
Maintenance works 412
Administration office 34
Selling department 72
 Direct wages 1,493
Indirect wages 650
Carriage inwards 84

Production overheads :
Incurred 2,423
Absorbed 3,591

Administration overheads:
Incurred 740
Allocated to production completed 529
Allocated to sales 148

Sales overheads:
Incurred 642
Absorbed 820
Finished goods produced 9,584
Finished goods sold (at production cost) 9,773
Sales realization 12,430

Question 3
ABC Ltd. operates integrated accounting system and the following details are given for the year ended
31st March, 1998.

Trial Balance as on 31st March, 1998

Debit Credit
Share Capital 20,00,000
Reserve 2,00,000
Creditors for purchases 1,50,000
Creditor for expenses 20,000
Freehold building at cost 5,00,000
Plant and machinery, at cost 13,00,000
Provision for depreciation on plant and machinery 1,00,000

Stock of:
Raw Material 2,20,000
Work in process 40,000
Finished goods 60,000
Debtors 2,00,000
Bank 1,50,000
24,70,000 24,70,000
The following data for the month of April 1998 are given
Particulars Rs
Raw materials purchased on credit 9,90,000
Raw materials returned to suppliers 40,000
Material issued to production 8,50,000
Materials returned from shop floor 20,000

Factory wages paid:

Productive 2,50,000
 Non productive (Normal) 50,000

Salaries paid:
Administration 1,00,000
Selling & Distribution 75,000

Overheads expenses incurred but not paid:

Production 3,00,000
Administration 50,000
Selling & Distribution 1,00,000
Depreciation for the month on plant and machinery 50,000
Sales on credit 20,00,000
Cash received from debtors 19,50,000

Paid the following :

Creditors for purchases 10,00,000
Creditors for expenses 4,30,000
Production overheads applied to production 3,90,000
Administration overheads applied to finished goods 1,45,000
Selling & distribution overheads applied to cost of sales 1,80,000

Closing stock:
Work in process 2,10,000
Finished goods 2,15,000
Income tax paid 30,000
Interest paid 3,000
Donation 5,000
You are required to show the appropriate ledger accounts for April, 1998 and Balance sheet as on that
date
Q. 4. The following incomplete accounts are furnished to you for the month of ended 31 st October 1998.

STORES CONTROL ACCOUNTS

1.10.98 To Balance 54,000

WORK IN PROGRESS CONTROL ACCOUNT

1.10.98 To Balance 6,000

FINISHED GOODS CONTROL ACCOUNT

1.10.98 To Balance 75,000

FACTORY OVERHEADS CONTROL ACCOUNT

Total Debit for October 45,000

FACTORY OVERHEADS APPLIED ACCOUNT

 COST OF GOODS SOLD ACCOUNT

CREDITORS FOR PURCHASE ACCOUNT

1.10.98 By Balance 30,000
Additional Information:
1. The budget for overheads for 1998 is Rs 6,75,000 and budget of direct labour hours is 4,50,000. The
production process is labour oriented.
2. The balance in the account of creditors for purchases on 31.10.98 is Rs 15,000 and the payments
made to creditors in October, 1998 amounted to Rs. 1,05,000.
3. The finished goods inventory as on 31st October 1998 is Rs. 66,000
4. The cost of the good sold during the month was Rs.195000.
5. On 31st October 1998, there was only one unfinished job in the factory, The cost records shows that
Rs. 3,000 (1,200 direct labour hours) of direct labour cost and Rs. 6,000 of direct material cost had
been charged.
6. A total of 28,200 direct labour hours were worked in October 1998. All factory workers earn same
rate of pay.
7. All actual factory overheads incurred in October 1998 have been posted.
You are required to find :
a. Materials purchased during October 1998.
b. Cost of goods completed in October 1998
c. Overheads applied to production in October 1998
d. Balance of work in progress on 31st October 1998
e. Direct materials consumed during the October 1998
f. Balance of stores control account on 31st October 1998
g. Over absorbed or under absorbed overheads for October 1998