PSG COLLEGE OF ARTS & SCIENCE

An Autonomous College – Affiliated to Bharathiar University

Accredited with ‘A’ Grade by NAAC (3rd Cycle)
College with Potential for Excellence (Status Awarded by the UGC)
Star College Status Awarded by DBT-MST, An ISO 9001-2015 Certified Institution
Coimbatore – 641014.

SUBJECT NAME: Financial Accounting

DEPARTMENTAL ACCOUNTS
Problem: 1
 Departmental Trading and Profit & Loss Account
for the Year ended 31st March, 2018
Dept. Dept.
Particulars Dept. A Dept. B Total Particulars A B Total
To Opening Stock 17,000 14,500 31,500 By Sales 60,800 51,250 1,12,050
To Purchases 35,400 30,200 65,600 By Closing Stock 16,740 12,050 28,790
To Wages 8,200 2,700 10,900
To Carriage Inward (2:1) 1,560 780 2,340
To Departmental Transfer:
Goods (-)420 (+)420 -
Wages (+) 500 (-)500 -
To Gross Profit C/d 15,300 15,200 30,500
77,540 63,300 1,40,840 77,540 63,300 1,40,840

To Rent, Rates, tax & Insurance

(2:1) 6,260 3,130 9,390 By Gross Profit B/d 15,300 15,200 30,500
To Sundry Expenses (2:1) 2,400 1,200 3,600 BY Discount Received 350 300 650
By Net Loss transfer to
To Salaries (2:1) 2,000 1,000 3,000 Capital A/c 1,250 - 1,250
To Lighting & Heating (2:1) 1,400 700 2,100
To Advertising (1:1) 1,840 1,840 3,680
To Discount allowed
(60800:51250) 1200 1020 2,220
To Depreciation
Furniture & fitting
(3,000X10%)(3:1) 225 75 300
Plant & Machinery
(21,000X10%) (3:1) 1575 525 2,100
To Net Profit transfer to
Capital A/c - 6,010 6,010

16,900 15,500 32,400 16,900 15,500 32,400

Balance Sheet of Mr. A

as on 31st March 2018
Liabilities Rs. Rs. Assets Rs. Rs.
Capital 47,660 Furniture & Fitting 3,000
Add: Profit of Department B 6,010 Less: Depreciation 300 2,700
53,670 Plant & Machinery 21,000
Less: Loss of Department A 1,250 Less: Depreciation 2,100 18,900
52,420 Sundry Debtors 6,060
Less: Drawing 4,500 47,920 Cash in hand 170
Sundry Creditors 18,600 Cash at Bank 9,900
Closing Stock 28,790

66,520 66,520
Problem: 2

Solution:
Departmental Trading and Profit & Loss Account
for the Year ended 31st March, 2018
Dept. Dept.
Particulars Dept. A B Particulars Dept. A B
To Opening Stock 40,000 - By Sales 2,00,000 71,000
To Purchase from outside 2,00,000 20,000 By Transfer of goods 50,000 -
To Wages 10,000 1,000 By Closing Stock 30,000 10,000
To Transfer of goods - 50,000
To Gross Profit c/d 30,000 10,000
2,80,000 81,000 2,80,000 81,000

To Advertisement &
Selling Exp. (4:1) 12,000 3,000 By Gross Profit B/d 30,000 10,000
To Net Profit 18,000 7,000
30,000 10,000 30,000 10,000
Income statement
To Provision for inter-
Dept. transfer of unsold
items or closing stock
(10000X25/125) 2,000 By Net Profit (A+B) 25,000
To Net Profit transferr
to Capital A/c 23,000
25,000 25,000
Problem: 3

Solution:
Departmental Trading and Profit & Loss Account
for the Year ended 31st March, 2018
Tailorin Ladies Outfittin Tailorin Ladies Outfittin
Particulars g Wear g Particulars g Wear g
1,54,08
To Opening Stock 41,280 33,975 93,721 By Sales 4,00,173 5 3,62,189
To Purchase 2,10,342 75,296 1,39,109 By Purchase Return 14,382 5,629 1,823
By Transfer to
To Sales Return - 3,259 11,217 Ladies Wear 389 - 5,801
By Transfer to
To Wages 72,823 30,084 24,613 Outfitting 6,679 - -
By Transfer to
To Transfer from Tailoring - 389 6,679 Tailoring - 5,315 4,271
To Transfer from Ladies
wear 5,315 - - By Closing Stock 32,840 43,828 81,626
To Transfer from outfitting 4,271 5,801 -
To Gross Profit c/d 1,20,432 60,053 1,80,371
2,08,85 2,08,85
4,54,463 7 4,55,710 4,54,463 7 4,55,710

To Stationery 307 307 307 By Gross Profit 1,20,432 60,053 1,80,371

To Postage 221 221 221
To General Charges 13,209 13,209 13,209
To Insurance 595 595 595
To Depreciation 1,820 1,820 1,820
To Establishment (Sales
Ratio) 28,176 10,565 24,654
To Bad Debts (Sales Ratio) 8,810 3,304 7,709
To Advertising (Sales Ratio) 3,241 1,216 2,836
To Rent & Rates 16,523 8,261 12,392
To Rent & Rates (others) 2,754 2,753 2,754
To Net Profit Before Tax 44,776 17,802 1,13,874
1,20,432 60,053 1,80,371 1,20,432 60,053 1,80,371

To Income tax (In the ratio of To Net Profit Before

profit Before tax) 2,804 1,122 7,102 Tax 44,776 17,802 1,13,874
To Net Profit after tax 41,972 16,680 1,06,772
44,776 17,802 1,13,874 44,776 17,802 1,13,874

Problem: 4

Solution:
Calculation of Closing Stock
Closing Stock = Opening Stock + Purchase - Sales

1 Department Opening stock Purchase Sales Closing Stock

Dept. A 120 1000 1020 100
Dept. B 80 2000 1920 160
Dept. C 152 2400 2496 56

Calculate Gross profit & Ratio of Gross profit

In order to determine the rate of Gross profit it is assumed that all the
units of purchase have been sold away
Dept A 1,000 X 20 20000
Dept B 2000 X 22.50 45000
Dept C 2400 X 25 60000
2 125000
Less: Total Cost of goods purchase 100000
Gross Profit 25000

Ratio of Gross Profit = 25000 / 125000

X100
20%
 Calculation Cost Price of each unit:

3 Dept. A Rs.20 X 80% 16

Rs.22.50 X
Dept. B 80% 18
Dept. C Rs. 25 X 80% 20

Calculation of Purchase, Opening Stock, Closing Stock & Sales Value

Purchase Opening Stock Closing Stock Sales
Dept.
Calculation Value Calculation Value Calculation Value Calculation Value
1,000 units 120 units X 100 units X 1,020 units
A X Rs.16 16000 Rs.16 1920 Rs.16 1600 X Rs.20 20400
4
2,000 units 80 units X 160 units X 1,920 units
B X Rs.18 36000 Rs.18 1440 Rs.18 2880 X Rs.22.50 43200

2,400 unit X 152 unit X 56 unit X 2,496 unit X

C Rs.20 48000 Rs.20 3040 Rs.20 1120 Rs.25 62400

Departmental Trading Account

Particulars A B C Particulars A B C
To Opeing Stock 1920 1440 3040 By Sales 20400 43200 62400
To Purchases 16000 36000 48000 By Closing Stock 1600 2880 1120
To Gross Profit 4080 8640 12480
22000 46080 63520 22000 46080 63520

Problem: 5
Solution:
Departmental Trading and Profit & Loss Account
for the quarter ending 31st March 2015
Particulars A B C Particulars A B C
To Opening Stock 30,000 35,000 15,000 By Sales 60,000 50,000 30,000
By Closing Stock
To Purchase 35,000 37,500 23,500 (B/F) 39,100 44,750 18,050
To Direct Expenses 10,100 7,250 3,550
To Gross Profit C/d 24000 15000 6000

99,100 94,750 48,050 99,100 94,750 48,050

To Indirect Expeneses 3000 2500 1500 By Gross Profit B/d 24,000 15,000 6,000
(5% on Sales)
To Stock Reserve 3910 4475 1805
(10% on Closing
Stock)
To Net Profit 17,090 8,025 2,695
24,000 15,000 6,000 24,000 15,000 6,000