— 5 a 207 RK Psocey Cosing r ® Year Question ~ Practical Ps and Ps On January 1, raw material nw 1. Z Ltd. produced product X through these processes ~ P), P and Ps On January rR 1,000 units were introduced in process Piat Rs, 50 per unit, The details of expenses incurred on the three processes during the year 2018 were as unde ® : per Sundry other materials Rs 1.600. 3.315 Rs. 3200, we iad Te tao naga! as te rw Normal loss (% of input) 5% 10% 5% Scrap value per unt ks to ims Bete ry Actual utp (nis) wu A ® Sale price of output perunit Rs. 70 Rs.100 Rs, 200 Entre output ofF was passed to the next process while 4 ofthe output of P2 was passed tothe PR ‘ext process and the balance was sold. The entire output of P3 was sold. Management expenses and seling expenses were Rs 6,000 and Rs. 9,000 respectively. These are not allocable the processes Be ee mancpe me ree ee (2001) ry Ans. a. P)- Rs. 57; Abnormal loss ~ 10units; P:- Rs. 76.37; Ps- Rs, 103.96; Abnormal gain - 8units. Profit - Rs34432 Beh B® panicutas prepare Process 8 Account or the year 2018 Pp Output of Process A transerred ~ 3,000 units 5 each, LW Production overhead ~20% of wages Output of Process B - 2,750 units Normal loss ~ 10% Scrap value of lost units - Rs. 2 per unit ‘Ans.: Process B- Rs. 7.48; Abnormal gain -0 units, (2002) 9 Bnvage teat SL ZA D in te process Q 300 unit ofa product were transformed from Process P at a cost of RS. 5,240. The “S27 additional expenses incurred for the Process Q were Rs, 760 and overhead was charged @ 10% of expenses incurred 20% of the inputs are normally lost and sold at Rs. § per unit. 220 uw Produced in the Process Q. Prepare Process Q Account and Abnormal ga Account Ans.: PQ - Rs. 25.50 Abnormal loss ~ 20; Costing P/L. - Rs. 350. O8s {2003} nits were 7 AiG: manufacturers a product which passes through two processes ~ Process A and Process B PE And then its transferred to Finished Stock A/c. From the following particular prepare Process A/c, Process A Process B , Input (Units) 30,000 26,000 = Materials (Rs.) 60,000 8000 PY AS Labour (Rs.) 36,000 30,550 Overhead (Is.) 18,000 21,900 Normal loss. 10% ? (Scrap Value per unit (Rs.) 2 3 There was no opening oF closing work-in-progress. The final output from Process B transferred to Finished Stock was 25,000 units. These finished goods are sold to RS.750 pee unit with a profit of Re. 1. What was normal loss rate in Process B? eae Ans.: A Ab. Loss 1000 units; Rs. 4; B= Ab. G Normal ines aie" et ~ 300 units; Rs. 65; Te ROE CUVEUUVUUTVUT208 formation Gv. Lid, Produces a single product which undergoes two process. From the followin ; WWE: Prepare Process A/c, Normal Loss Account, Abnormal Loss Account and Abnormal Gain A/c. Process A B Raw Materials issued (3,000 units) Rs. 15,000 - Additional Materials Rs.1,000 Rs. 780 Direct Wages Rs, 14,000 Rs, 20,000 Production Overhead Rs.3,000 Rs. 7,500 Normal loss as % of input 10% 5% Scrap Value per unit Rs.2 Rs.5 ‘Output in units 2,800, 2,600 fs Ans A- Rs.12; Ab. Gain 100 units; B - Rs. 23; Ab. Loss 60 units. @, Ina process, 200 units of materials have been introduced ata cost of Rs. 9,600 and other expenditure \Wincurred in the process are: Wages Rs. 3,000 and Overheads Rs. 1,300. Estimated normal loss is 15% and scrap value is Rs. 10 per unit. The actual output is 180 units. Show the Process Account and Abnormal Gain account. ‘Ans.: Rs. 80; Ab. Gain 10 units; Costing P/L -700. In Process D, 9,000 units of a product was transferred from Process C at a cost of Rs. 54,000. The yy. additional expenses incurred for Process D were -~ Sundry materials Rs, 2,500, Labour Rs. 6,000, Direct expenses Rs. 3,350 and overhead charged @ 200% of labour, wastage of Process D was sold at Rs. 2/ unit. The final product from Process d was sold at Rs. 10 fetching a profit af 10% on sale. Calculate the rate of normal loss of Process D on the basis of input. ee Ans: 5%. an) A chemical product passes through three different processes to convert into a finished product. SY Data relating to the product for the month of January 2019 are given below: Total Process-I Process-II _Process-III (2006) Rs, Rs. Rs. Rs. Basic Raw materials (20000 units) 20,000 20,000 - - Other materials (Rs) 13,000 4,000 5,000 > 4,000 ct wages (Rs.) 30,000 12,000 10,000 8,000 Direct Expenses (Rs.) 575% 14,000 29,140 14,450 Production overhead (Rs.) 15,000 - - - (absorbed as a percentage of wages) (Output (in units) 18,200 17,400 16,400 ‘Normal Loss in Process of input 10% 75% 5% Scrap Value per unit Re.100 Rs. 2.00 Rs. 3.00 There was no stock at start or at end in any process. All goods are sold at 20% profit on Sales, You are required to prepare the necessary accounts. (2008) An: PI Rs. 3; Ab. Gain 200 units; P2 Rs. 6; Ab. Gain - 565 units; P3 - Rs, 8; Ab. Loss ~ 130 units, ‘The following information is available in respect of Process ~Ilof a product. 2 ‘Input (1,000 units): Cost Rs. 5,000 Further Materials introduced Direct Labour Overhead Charges Output of Process-II Normal WastageSo 209 Ba Scrap Value of Wastage —Rs.2 per unit Prepare Process Il A/c and Abnormal Gain A/c ‘Ans.: Rs. 20.82; Ab. Gain - 50 units; Costing P/L ~ Rs. 941 (2009) ° — A,B, C, 1000 units @ Rs. 4 per unit were introduced in ‘A product passes through three processes ~~ A, B, ‘ ae A’, Production overheads are absorbed as a percentage of direct wages. The following information is available from the cost records: Process A Process B Process C Total Bs. Rs. Rs. eg Other materials 5,200 2,050 11,250 EE direct Wages 4500 2.800 14,660 Production overheads baad " * 14,660 ‘The actual output & information relating to normal loss of the different processes are given below: Normal Loss as a Output Value of Scrap percent of input units per unit (Rs.) Process A. 10% 900 2 Process B 20% 680 4 Process C 25% 540 5 Prepare Process Accounts, Abnormal Loss Account and abnormal Gain Account. Ans. A -Rs, 20; B - Rs. 50; Ab. Loss ~ 40 units; C - Rs, 80; Ab. Gain - 30 units, (2010) 3¥ Ina manufacturing unit, raw material has to pass through four successive operations to reach the (Gp finished product stage. The normal loss in operation Il Il and IV are 163%, 20% and 167% of the input respectively. Cost of raw materials required to produce 8000 units of finished product is Rs. 43,200. Weight of one unit of finished product is 0.10 kg. The price of raw material is Rs. 20 per kg, Calculate the normal loss in operation I as percentage of input. Ans. 331%. (2011) G2) xyz Usd. produces a standard product through Process ~ A and Process ~B. Finished product of 153. Product of Process ~ A is used as raw materials of Process —B. © From the following details prepare Process ~ A Ale, Process ~B A/e, Abnormal Loss Alc, Abnormal Gain A/e and Normal Loss A/c: Process A Process B Input (units) 15,000 13,000 Material cost (Rs.) 30,000 4,000 Labour cost (Rs.) 13000 15,275 Factory overhead (Rs.) 9,000 10,950 ‘ Normal loss 10% 5% Scrap value per init (Rs.) 2.00 3.00 ‘The final output from Process ~ B was 12,500 units. ‘Ans: Process A - Ab. Loss 500 units; Rs, 4; Process B- Ab. Gain 150 units; Rs. 6.50. (2012) Bx Ld. produced a product through two distinct processes A and B and then to finished stock. From /Ahe following information, prepare Process A A/c, Process B AJ, Normal Loss Alc. Abnormal Lose Alc and Abnormal Gain Alc: Process A Process B Input units 15,000 13,000 Materials (Rs.) 30,000 4,000 Labour (Rs) 18,000 15,275, Overhead (Rs.) 9,000 10,950, Normal Loss 10% : Scrap value per unit (RS.) 2.00 3.0 sae t The final output from process B transferred to finished stock 12,500 units. The finished BOP sold at Rs. 7.50 per unit with a profit of Bs. 1.00 per unit ‘ toss - ‘Ans: Process A - Ab. Loss 500 units; Rs ; Process B- Ab. Gain 150 units; Rs. 6.50; Normal 10 5%; Costing P/L Rs. 475. ; the BK the end of process ‘A’ carried on in a factory during the month ending 31" Decenber 2018 te number of units produced was 1,900 excluding 110 units abnormally damaged during he P s during the The damaged units realized Rs. 4.00 per unit of scrap. A normal wastage of 8% occur process, the wastage realized was Rs. 3,00 per unit A unit of raw-material cost was Rs. 5.00. The other expenses for the month were: Rs. : © Wages 900.00 inal SS Power 300,00 7 General expenses 800.00 161% on selling price. The rest of the output of 45% of the output is sold so as to show a profit of 1 process ‘A’ transferred to process ‘B’ Al. Prepare Process’‘A’ A/c and Abnormal Loss A/c. i ‘Ans.: Material input in process A - 2,185 units, Effecting cost - Rs. 6.169; Normal loss ~ 175 units; Costing P/L -Rs. 239. Selling Price ~ Rs: 6,329 (2015) The following are the details in respect of Process A and Process B of a processing factory: y Process A Process B_ F. Goods sy Y Rs) (Rs) (Rs.) Opening Stock 7,500 9,000 22,500 Materials 15,000 15,750 Labour 11,200 11,250 Overhead 10,500 4,500 Closing Stock 3,700 4,500 11,250 Inter process profit included in opening stock 1500 8,250 Sales - “= 1,40,000 Profit on transfer price 25% 20% Prepare Process A, Process b and the Finished Stock Account. (2016) Ans. Profit: Process A Rs. 13,500; Process B Rs. 22,500; Finished Goods Rs. 16,250; Unrealised profit in Closing stock of Process B Rs. 714; Finished Goods Rs. 3,573. Digvijoy Ltd. manufactures a product which passes through two distinct processes — process A and sgf Process B and then itis transfered to finished stock. From the fllowing particulars prepare (a) Process Accounts (b) Abnormal Loss Account and (c) Abnormal Gain Account: ProcessA Process B Input (units) 60,000 52,000 Material (Rs.) 60,000 8,000 Labour (Rs) 36,000 30,550 Overhead (Rs) 18,000 21,900 Normal loss 10% 2 Scrap value per unit (Rs.) 1.00 3A ~vuvuvuwwewr~e = am There was no opening or closing work-in-progi inal output from Process ‘om Process B tr finished stock was 50,000 units These finished goods are sold at Rs. 3.90 per unit tehing are y rofit of 207% on cost. ‘Ans: Process A: Ab. Loss 2000 units; Effective Cost Rs. 2; Process B: yr ‘ Normal Loss 15, ; ‘Ab. Gain 16200 units; Effective Cost Rs. 3.25; Costing PLA, Loss Rs. 2000 Ab, Gane sae 7 The following are the details in tespect of Process and Process Bof a processing factory WY Process A Process B_ Finished Good: % Rs. Rs, om Opening Stock Mes meee a Mat 00 50.00 Labour “Mm gon Overhead at. ee Closing stock _.. a oe Inter process profit included in opening stock 600 oe Sales oe Profit on transfer price pane a Prepare Process Accounts and the Finished Stock Accounts, [use average method in determining unrealized profit on closing stock, if any | Ans.: Profit: Process A Rs. Process B Rs. ; Finished Goods Rs. profit in Closing stock of Process B Rs. ‘inished Goods Rs. (2018) 1 Unrealised e product of a manufacturing concern passes through two processes, viz., A and B, and then to finished goods. From the following information prepare Process A Account, Process B Account, 7 Normal Loss Account, Abnormal Loss / Gain Account/s: Process A Process B @ Materials introduced (in tons) 2,000 Mo 99} Cost of material per ton (Rs.) 250 400 ae Output (tons) 1.660 1,560 Normal weight loss (%) 5 5 Scrap (% of total input) 10 10 Scrap value per ton (Rs.) 160 400 Direct wages (R5.) 112,000 40,000 Manufacturing expenses (Rs.) 32,000 2,000, (2018) 20 (Boronnel oe) 3 “Precot = Bo (Abnsenel Gein) JI. Product Z passes through two processes before itis transferred to finished stock. The following ‘information is available: Ans: @-Pnocan:(A) Process A (Rs) | Process B (Rs) | Finished Stock (Rs) Materials 80,000 = a Labour 104,000 180,000 = Overhead 40,000 60,000 = ‘Closing stock at cost 32,000 80,000 60,000, Profit on transfer price 20% 20% = ‘There is no stock at the beginning, Sales were Rs. 8,20,000. Prepare process accounts and the Finished Stock account. (2019) ‘Ans. Profit: Process A Rs, § 00> ; Process B Rs.\ 60,9) ; Finished Goods Rs. s,s Unrealised Profit in Closing stock of Process B Rs, GL Finished Goods Rs.) - ASG 079 ie ae1s the following information: fe of 250,000 kms, Driver's salary ~ Rs. 700 p.m, Cleaner’s rent ~ Rs, 2400 p.a, Tax Rs. 1,200 pa., Diesel hoot ae 2. Garage rent ~ Rs, 2400 p. pa, Bn walter -Ra np Fare, Oil and other sundries Rs. 20 per 125 kms. . Aaj the owner ofa taxi supplie & 2c Rs. 1,50,000 with total li pairs ~ Rs. 3,00 P. Cost of taxi © eonsumption 8 kms. Per SOP the taxi runs 100 kms per day eo tunsithout any passenger cate th cst of eunning te tax per km. oe for an average of 25 days in a month. 20% of the distance has been hosts. 3 Ween truck starts witha load of 10 tonnes of goods from station D. It unloads 3 tonnes at station E and ~ aor gods at station Ft reaches back drt to station D after getting reloaded with 8 tonnes of veda totaton FT distance from D 10 E, Eto F and then from FtoD ae 80 kms, 120 kms, and - ew, Joo kumis respectively. Calculate absolute & Commercial Ton Km. © A ans. Tonne kms. - 2,920. (Absolute) (2001) i / West Road Co, runs 10 buses between two places covering sae of 25 kes Seating capacity of voce us 30 passengets. The expenses forthe month of April, 2018 were asunder: |, Salaries of sirens conductors +> 9,000 ~ Aut assur “39 oe Gee ae SE YZ Diesel, oil and lubricants O00, AS urge eT ‘Taxes Insurance etc. + 7,800, Ors, Repairs and maintenance > 12,000 oe > 48,000 x Depreciation {60% of seat round trips daily 1. Find out cost per passenger-kilometer b. What would have been the cost per round trip per passenger, if seating capacity utilisation were 0 up to 80%? ‘Ans.:a. Cost per passenger km Rs. 0.252; b. Cost per passenger per round trip-Rs.9.45. (2003) 1, capacity was utilised in each case, All buses ran 25 days a month each making four _JAA transport company runs 5 buses between two places covering a distance of 25Kms. Sitting “Zo asc oben pangs. General siting capacity tiled in ach bus, Al {pres 25 days a month ath making 4 ound tps day If ttl operating cot ring» month 7 tor al the five buses is Rs 6 lakhs and profit on takings is assumed tobe 20%, calculate the bus fare to be charged foreach passenger km, Ans: Rs, 200, {2006 X & Company runs a bus between two places covering a distance of 30kms. Seating capacity of the bus is 30 passengers. The expenses for the month of May 2018 were as follows: © Re Ow Salaries of driver, conductor and other staffs 10,000 ws Diesel, oil and lubricants 6,000 Repairs and Maintenance 1.600 Depreciation 4,000 The bus ran 25 days in May, 2018 making two round trips per day. 60% of the capacity was utilised a Find cost per passenger km. What will Be the fare per passenger ifthe company wants to maintain a profit @ 20% on sales. Ans.:a. Rs. 0.40; b. Fare per passenger for a jougney of 30 kms. (one Way)- Rs. 15. (2007) SLLEELELELULELUUT TUTE202 ZB Volvo Corp. owns a bus which runs according to the following schedul Route Distance No. of days run Seating ® one-way each month Occupancy ®s DelhitoChandigarh 150Kms_ 8 90% CY Delhi to Agra 120Kms 10 85% Delhi to Jaipur 270Kms 6 100% Other Details Cost of the bus Rs. 6,00,000; Driver's Salary Rs. 6,800 p.m Conductor's Salary Rs. 6200 p.m. Administrative Exp. Rs. 2,000 p.m. Insurance of the bus Rs. 12,000 pa Diesel and oil consumption ~ 4 kms per litre at Rs. 36 per lite. Road Tax : Rs. 15000 pa, Permit fee ~ Rs, 1000 p.m. Lubricant Oil (other than Diesel and Oil) Rs. 40 per 100 kms. Repair and Maintenance Rs, 5000 p.m. Depreciation of the Bus 20% p.a. Seating Capacity of the Bus :50 Passengers Passenger Tax is 20% of the Total Takings. Calculate the bus fare to be charged from each passenger to eam a profit of 30% on total takings. The fares are to be indicated per passenger for the journeys ~(1) Delhi to Chandigarh 2, Delhi to Agra and 3, Delhi to Jaipur. Ans. i. Rs. 87.765; ii, Rs. 70.21 (2010) | PAXalvo Company runs 10 buses between airport and Tollygunge covering a distance of 25 kms. | Gey Seating capacity of each bus is 60 passengers. The expenses for the month of December'2018 were as Dsotiows: ey) x es Salaries of drivers and conductors. 360000 Salaries of mechanical staff 36000 Diesel. Oil and lubricants 240000 Taxes, insurance etc. 31,200 Repairs and maintenance 48,000 Depreciation of the buses 1,92,000 80% seating capacity was utilized in each cases, All buses run 25 days during, the month. Each bus runs 4 round (up-down) trips daily. Calculate the cost per passenger-kilometer and passenger-fare for one-way journey if company makes profit of 25% on cos (2013) Ans. Total passenger km - 24,00,000; Cost per passenger km - Rs. 0.378 wm Tribed Saha has started a transport business with a let of 10 tans, The 1 various expenses incurred by him are given below: Cost of each Taxi s.3,00,000 20° Salary of off a st y salary of office staff Rs, 6,000 p.m. 4s ei g Salary of Drivers Rs. 8,000 pam. per taxi 50> . Salary of Garage staff Rs, 1,600 pum, 160 ot Garage Rent Rs, 4,000 p.m. 48 ae Road Tax & repairs Rs.8640 pm. 8 — \\994 Insurance premium @ 5% of cost of each taxi pa. [260 The life of each taxi 300,000kms and at the end of which i is estimated to be sold at Rs, 60,000. A Taxi runs on a average 4,000 km per month, 20% of which it runs empty, Petrol consumption is one@ 23 Re, 50.00 per litre, Other sundr litre per 10 km. Cost of petrol ;penses amounted to RS. 40,00 per 100 km. 3 Caleulate the effective cost of running a taxi per kilometer, ‘Ans.: Operating cost / km - Rs. 11.27 (2014) 11.80 per kn, taxi fare. He is considering two other alternatives ~~ (i) the 9, _Dr.J. Kundu spends Rs + or (ii) purchase of old big car. The estimated expenses for these two purchase of new small ca alternatives are as follows: New small car Old big car Rs. Rs. Purchase price 70,000 40,000 Scrap value after 10 years 30,000 20,000 Servicing and other fixed expenses Pa. 1,500 2,400 Tax and insurance per annum 3,500 1,500 10 7 Km. ran per litre of petrol Petrol price pt lite is Rs, 36.00 His estimated annual requirement fo travel i 1,000 km. Which of three options will be most economical for him? (2015) ‘Ans.: New small car Rs, 6.50 per km. an Transport Enterprise runs 10 buses between two places which are 25 kms apart. Seating capacity ofeach bus is 30. The expenses for the month of March, 2017 were as under: sersalaries Rs. 1,32,000; Lubricant Rs. 18,000; Taxes and insurance Rs. 10,000; Repairs and ance Rs. 16,000; Depreciation Rs. 64,000 and Diesel consumption ~ 2 liters for 20 kms @ 3) z,mainten: Rs. 60 per liter. «+ Seating capacity utilize was 60%. All the buses run 25 days of the month. Each bus made four round trips daily. fa. Find out the cost per passenger-kilometer and cost per round trip per passenger. What would be the cost per round trip per passenger, ifthe seating capacity utilization were to up to 80%? (2017) ‘Ans. Rs. 0.60 per Passenger-Kilometer & Rs. 30 per round trip; at 80% capacity utilization Rs. 2250 per round trip. ' 11. Mohan Transport Company operates a luxury bus, which runs between Delhi to Jaipur and back for” 10 days in a month. The distance from Delhi to Jaipur is 300 kms. The bus completes the trip from Delhi to Jaipur and comes back on the same day. The bus goes on/a Delhi-Agea trip for 10 days in a month, The distance from Delhi to Agra is 200kms. This trip is also completed on the same day. For 4 days of its operation in a month it runs in the local city. Daily distance covered in the city is 100 kms. The other information is given below: Cost of Bus Rs. 30,00,000 Distance covered per liter 5 kms. Depreciation p.a. 15% Lubricant oil per 100 kms. Rs. 600 Salary of Driver p.m. Rs.13,500 Repair & maintenance p.m. Rs. 16,000 Salary of Conductor p.m. Rs. 8,000 Seating capacity’of the bus 50 persons Insurance per quarter Rs. 21,600 Diesel per liter Rs. 80 “The bus is generally occupied 90% of the capacity when it goes to Jaipur and 80% when it goes to ‘Agra It is always full when it runs within the city. Passenger tax is 20% of total fare Calculate the rate of fare, the company should charge a passenger when it wants to earn a Profit of 334/.% on its revenue. : (2018) ‘Ans.: Fare Rs, 1.637 Per passenger-km; Operating Cost Rs. 337,680; Total Revenue Rs. 7,23,600. VUVUPUVLEULUUUUULUUUUUE herr ree ee12¢A transport company maintains a fleet of 10 trucks for transporting goods from Kolkata from Asansol via Durgapur, The distance from Kolkata to Durgapur is 250 kms. and that from Durgapur to Asansol is 30 kms. Each truck operates 26 days in a month on an average, starts everyday from ‘Comes back to Kolkata after getting reloaded with goods weighing 8 tons at Asansol. (O)Kotkata with a load of 10 tons. It unloads 6 tons at Durgapur and rest of the goods at Asansol. It oa NY You are required to calculate cost per ton-km. when the total monthly expenses for a truck are Rs. 1,89,540. {2018} Ans.: Rs. 1.50 13. Ultra Ltd. supplies the following details in respect of a truck of 5-tonne capaci Cost of truck —Rs. 18,00,000; Estimated life ~ 10 years; Lubricant ~ Rs. 150 per trip each way; Repairs and maintenance ~ Rs. 10,000 p.m.; Driver's wage ~ Rs. 15,000 p.m.; Cleaners wage - Rs. 5,000 p.m.; Insurance, tax and others - Rs. 1,20,000 p.a. ‘The truck gives an average of 10 kms per litre of diesel and cost of diesel is Rs. 65 per litre, ‘The truck carries goods to and from the city covering a distance of 50 kms each way. On outward trip, freight is available to the extent of 80% capacity and on return 20% of capacity. ‘The truck runs on an average 25 days a month. Calculate the operating cost per tonne-km and the rate per tonne-km that the company should charge if a profit of 50% on freightage is to be earned. {2019} Ans.: oe ohh Po ARGS ef o fof f aha‘Year Question ~ Practical as on 31,3.2019: Ft: has supplied the following information i respect of incomplete contract | Contract ARs, Contract B me i Conta pice zanoon 1s. bag H Works certified 2, 16,000 1, 004 Yb ‘ 2, 10,000 1, 20,000 Estimated cost of completion of contract , 104 anit “Cash received 1,60,000 he 1 Uncertified work 10,000 Hes Cost of contract (expenditure Incurred upto 31.3.2019) 1,80,000 } Calculate the profit to be carried to P/L Ale. for the year ended 31.3,2019. a Ans. PIL Alc A - Rs, 22,716; B- Rs. 6,400; Reserve - A - Rs. 23, 284; B - Rs. 5,600. & A firm of Building Contractors undertook a contract for Rs. 3,00,000, The following, particulars are furnished for the year ended 31 March, 2019: Materials Rs. LY Direct Purchase 50,000 i | Issued from stores * 10,000 py tga na General Plant in use 40,000 Written down value 90,000 : Depreciation there on 10,000 i Direct expenses 2,500 Sub-contract charges 6,000 : Share of general overhead 2,000 ; } Materials in hand on 31.3.2019 2,000 : Material lost by fire 500 ‘ Salvage value thereof 150 ‘| Wages acciued on 313.2019 6,000 ‘ Cash received (90% of works certified) 1,62,000 ‘ Cost of uncertified work 5,000 Prepare Contract Account, value the work-in-progress and show he appear in the Balance Sheet. the various items would Ans. Cost to date - Rs, 1,24,000 P/L A/c - Rs, 36,600; Reserve - Rs. 24,400, (2002) DS Ltd started a contract on 1* June, 2018 for construction ofa Link Road fora contract price of Re, 2 “7, 5, 0,000 to be completed by 31" March 2019, The budgeted cost ofthe contract was Rs. 4, 50,000, : The following particulars are obtained for the year ended 31 March, 2019:- . Rs. a Materials issued from stores 48,000 ‘ Materials bought direct to site 40,000 Materials from other contract 24,500 s Material at site (Closing) 6,000 a Materials returned 2,000 Materials lost in accident 8,000 < Insurance claim accepted 5,000 Wages paid 74,500 . Plant issued to site at WDV 30,000 Hire charges of plant 38,500 ” Supervision expenses 15,500UUCUUUUVAUATAAAT Te wd e) awe ‘ verry GC wf % 5/ On 1.4.06, Bright. Ltd, under took a contract to construct a building for Rs. 25,00,000 and furnishes Y the following details fr the year ended 31.3.19: Normal loss of materials 2,000 Un-certified work-in-progress 17,500 Share of other expenses 5,500 Paid to sub-contractors 25,000 Outstanding wages on 31.3.2019 1,500 Payment due to sub-contractor on 31.3.2019 2,000 Value of work certified 2,75,000 Advance from contractee ? (90% of work certified) Sale of unused materials 8,000 (Cost Rs, 10,000) Opening balance of a plant lost in accident at last 6,009 Depreciation on plant @ 20% p.a Draw the Contract A/c and Contractee’s A/c. also computes the Value of Work: Ans.: Material consumed 86,500;Cost to date - Rs, 2,54,000 P/L A/c - 23,100 Res WIP - Rs, 277,100. “Ye The following information relates toa contact fr Rs &, Materials issue fom stores WY Materials purchased forthe contract 1,000 Notinal kgm of materia 1960 193, progress. serve - Rs, 15,400; 12004) 12, 00,000. (The contractee paying 90% of the value of work done as certitied by the Architect and rest on completion ofthe contract). Rs, 2,85,000 Plant installed at the site 1,76,000 ‘Wages paid to the workers 4,62,000 Direct expenses paid for the contract 53,000 ‘Overhead expenses paid 39,000 ‘ Direct expenses accrued on 31.3.2019 6,200 Of the plant and materials charged to the contract, plant which cost Rs. 9,600 and materials costing Rs. 8400 were lst. Work certified Rs. 9,70,000. Charge depreciation on plant @ 10% pa. Prepare Contract Account. ins: Cost to Date - Rs. 9, 45,400; P/L A/c - Rs. 14,760; Reserve - Rs. 9,840. Material issued to Contract Direct purchases / Issued from stores, ~ Wages incurred Apportioned H.O. Expenses Subcontract charge Other works expenses (10% of wages) Plant installed at cost Materials returned to stores Direct expenses S @ Rs. 3,75,000 125,000 7,00,000 40,000 30,000 2,00,000 7,000 10,000 Cost of plant transferred to another Contract on 17.18 50,000 Materials stolen from site Insurance claim received Sale of unused materials (cost Rs. 8,375) 10,000 3,000 5,000 (2005)Sire following particulars are available in respect of a contract as on 31 Materials in hand on 31.3.19 2000 Direct expenses accrued on 31.3.19 2,000 Cash received 12,80,000 Retention money 20% Cost of uncertified work 12,000 Depreciation to be charged on plant @ 15% pa ofit/Loss Prepare Contract Ale in the books of Bright Ltd, showing therein the amount of Profi/Las transferred to P/L Ac (2007) ‘Ans.: Cost to Date - Rs, 13,30,000; PL A/e- Rs. 150,400; Reserve - Rs. 1,31,600. 1" march 2019. © Rs. Oy Contract price 5,00,000 Ry A Total Cost of Contract upto date 2,87,000 7 Cost of uncertified work 12,500 % \@® € Cash received 2,65,625 Retention money @15% Be ra ‘Compute the amount of profit that may be credited to Profit and Loss Account and the value o| Worksin-Progress. ‘ {2008} Ans.: Credit to P/L A/c - Rs, 28-250; Value of WIP - Rs. 3:08;250: 25 3,980,533, ‘Ambuja Construction Ltd. entered into a contract to construct a building. The contract value was Rs. 13,00,000 to be realized in installment on the basis of value of work-certfied by the architect subject to a retention of 10%. The work commenced on 1.4.2018 but it remained incomplete on 31.12.2018. when the final accounts are to be prepared. The facts and figure of the contract are: Rs. Material issued to contract 3,60,000 ‘Wages paid 1,74,000 Expenses incurred on the contract 77,500 Plant sent to site on 142018 64,000 \ Wages unpaid 6,300 Total establishment expenses amounted to Rs. 82,000 out of which 25% is attributable to the contract. Out of materials issued to the contract, materials costing Rs. 8,000 were sold for Rs. 12,000. A part of the plant (Cost Rs. 4,000) was damaged on 1.10.2018 and scrap realized only Rs. 600. Plant costing Rs. 6,000 was transferred to another contract on 31.12.2018, Plant isto be depreciated @ 10% p.a. Material in hand on 31.12.2018 was Rs. 35,000. Cash received from the contractee was Rs. 6 12,000. Cost of work yet to be certified was Rs. 60,000. Prepare Contract Account and Contractee Account in the books of Ambuja Construction limited Ans Dep Rs. 4,700; Cost to Date-Rs.6, 00,000; P/L A/c-lRs. 84,000; Contingency reserve-Rs. 36,000. {2009}, ga the following particulars, compute a conservative estimate of profit on a contract to be credited to Profit and Loss Account at the end of an accounting period. fa) Rs, ‘a. Total expenditure to date 85,000 b, Estimated further expenditure required to complefe the contract 17,000 a {including contingencies) ©. Total contract price . 153,000 4. Value of work certified 114,000 ©. Cash received is equal to 80% of work certifiedAns. Fastimated Profit-Ry, $1,000; Profit taken to PIL Ale Rey. 1, ~“v""CCUODLEEEDEEEEEUGEEE 2010) N trey of Building contractors unieriook a contract for Rs, 350,00, The following particulars are YY" furnished for the year ended 31 December, 2018 Ks, >) Materials gg Dinvet purchased 0,000 Z Irsued from stores 10,000 ‘ 10s for Labour 40,000 ral Plant in wse Written down 90,000 Depreciation thereon 10000 Direct Expenses 2,500 i Subeontract charges 6,000 Share of general overhead 2,000 Material in hand on 31.12.2018 2,000 Material ost by fire 500 Salvage value thereof . 150 Outstanding, wages on 31.12.2018 6,000 Direct expenses accrued on 31.12.2018 1,000 Cash received (99% of work certified) 1,62,000 Cost of uncertified work 5,000 pare Contract Account Ans.: Cost to Date - Rs, 1,05,000; Costing P/L - Rs, 48,000, (2012) S. and Co, (2013) Ltd, a firm of building, contractors, undertook a contract for Rs, 6,50,000 to relies con the basis of the value of work certified by the architect subject to retention of 10%. The work commenced on 14.2018 but it remained incomplete on 31.12.2018 when the final accounts are to be ts and figures ofthe contract are: Materials charged to contract 180000 ‘Wages paid for labor 87000 Plant charged to contract at the commencement 32000 Expenses incurred on contract 38750 Total establishment expenses amounted 10 RS. 41,000 out of which 25% is attributable to this contract, Out of the material issued to the contract, materials costing Rs. 4000 were sold for Rs, 5000, A part of the plant (cost Rs. 2000) was damaged on 1.10.2018 and the scrap realized Rs. 300 only, Plant costing Rs. 3000 was transferred to another contract site on 31.12.2018, Plant is to be depreciated @10% p.a, Materials on hand on 31.12.2018 Rs, 17500. Cash received from the contracted Rs, 306000, Cost of work not yet certified Rs. 30000. Prepare contract account showing therein the amount of profit oF los to be transferred to profit and loss account. (2013) ‘Ans Dep" on Plant Rs, 2,350; Cost to Date - Rs, 318,350; Value of work certified - Rs, 340,000; ’ Costing P/L - Rs. 20,990. Y yee, 11. firm of building contractors undertook 4 contract for Rs. 30,000, The following particulars are * £* turmished for the year ended 31 December, 2018: Materials: Rs. ' 6D og Oy Direct purchases 40,000 Issued from stores 20,000| Ja Wages for labour 30,000 ba General plant in use: < Written down value 80,000 4 y y Depreciation there on 10,000 ai Direct expenses 2,500 es Sub-contract charges 6,000 as} Share of general overhead 2,000 4 Materials in hand on 31.12.2018 2,000 Outstanding wages on 31.12.2018 2,000 Direct expenses accrued on 31.12.2018 2,000 Cash received (80% of work certified) 1,60,000 Cost of uncertified work 50,000 Prepare contract account, value of work-in-progress and show how the various items would soress in the Balance Sheet. aes, 95;833; Ans: Cost to date - Rs. 1,12,500; Profit - Rs. 73,333; Value of work certified - Rs. P5423, Contingency Reserve Rs. 64,167. ° WTP - 21,8083 12, Mjs. Eastern contractors undertook a contract for construction of a Highway on 1* April, 2018. The following expenses were incurred during the year ended on 31" March, 2019: Rs. Materials issued 30,000 Stores purchased 8,000 ‘ : Direct wages 25,000 Plant issued 40,000 ‘Supervision expenses 10,000 Sub-contract cost 20,000 Other information: a. The contract price as per agreement was Rs.1, 00,000. b. Depreciation to be charged on plant @ 20% p.a 25% of the plants was destroyed in an accident on 30.09.18, However, a compensation of R.5, 000 was realized from insurance company. 4d. Materials transferred to another contract Rs.8,000, returned to store Rs. 2,000. €. Balance of materials and stores at site were Rs7,000 and Rs. 3,000 respectively besides the plants. f. Cost of work completed but not certified Rs.10,000 and cost of work not completed and not certified Rs. 3,000, Surveyors fees due Rs.4,000. (ddd ddd & The architect had certified 4/5 of the contract. Cash was received 90% of work certified, : h. Charge for establishment expenses @ 20% of direct wages and office overhead @ 10% works cost, Prepare Contract A/c and Contractee A/c. (2015) ‘Ans. Dept= Rs. 7,000; Works Cost - Rs. 89,000; Cost to Date - Rs.97, 9 ‘osting P/L - Rs. (4,900). 33. Sinha & Co. undertook a contract to construct a building for which the following information are \? supplied on 31.12.2018: % Construction started on 1 January ‘2018. Rs. Contract price 16,00,000 Materials sent to 3,00,000 Wages paid 3.60,000 (444444444 ‘Wages unpaid 2,000EELELLELELLEEOEBEUUUYUUEE Yee eee rere 52,000 Other Expenses Plant sent to site soo Cash received 20, Materials returned to stores 10,000 Materials lying unconsumed 16,000 Materials stolen from site 20,000 Insurance claim admitted for Materials stolen 14,000 Work-uncertitied 22,000 Plant is subject to depreciation 197 75% pa. and cash has been received for 90% of work-certified, Prepare Contract A/c and Direct Material Stolen A/c in the book of Sinha & Co. for the year ended 31" December 2018, Ans. Cost to date: Rs. 6,98,000; Costing P/L Rs. 74,000; Contingency reserve Rs. 49,600, (2016) JA, Biswakarma Construction Ltd. entered into a contract to construct a building. The contract price ¥ retention of 15%. The work commenced on 1.4.2018 but remained incomplete on 31.12.2018, The particulars are given below: Rs. Plant installed at site on 01.04.2018 32,000 Materials consumed 1,80,000 Wages paid 85,000 Expenses paid 38,750 Total establishment expenses out of which 25% is attributable to this contract 441,000 Wages outstanding on 31.12.2018 2,000 Plant costing Rs. 2,000 was damaged on 1.10.2018 300 and sold as scrap , Plant costing Rs. 3,000 was transferred to another contract on 30.11.2018 Materials in hand on 31.12.2018 17,500 Cash received 2,89,000 Cost of work not certified 30,000 Plant is to depreciated © 10% paa Prepare Contract Account showin, Account, Ans Cost to date: Rs. 3,18,325, Depreciation Rs, 2,325, \YF 0n 31.03.2018. The Particulars available for the Rs, Balance as on 01.04.2017: Material a site 10,000 Plan at site 60,000 wp 120,000 Outstanding Wages 8,000 Prepaid architect fees 4,000 Plant issued Stores purchased at site Architect fees paid Hire charges Establishment charges Normal loss of materials ‘was Rs. 650,000 payable on the basis of the value of work certified by the architect subject to a 18 therein the amount of profit'to be transferred to Profit and Lossaa 198 Se td Advance from client 1,00,000 Sale of unused materials en Material issues 90,000 Materials returned to stores. ae Wages paid 48,000 Materials lost. by fire (claim 18 received Rs. 8,000) Depreciation is to be charged on Plant © 20% p.a. Some general machines valued at Rs. 80,000 were also in the contract for three months or’ which same rate of depreciation is applicable a Prepare the Contract No. 185 A/c and the account of the Contractee for the year 2017-18. (2 ‘Ans. Costing P/L Rs. 1,06,000; Depreciation Rs. 40,000. 16. On 01.04.2018, B. Ltd. Undertook a contract to contract a building for Rs. 20,00,000 and furnishes the following details for the year ended on 31.03.2019: Materials issued to the contract 4,00,000 Material stolen from site 8,000 Wages incurred 5,60,000 Insurance claim received against above 2,400 Apportioned head office expenses 32,000. Sale of unused materials costing Rs. 4,000 6,700 (treated as normal) Subcontract charges 24,000 Materials at site on 31.03.2019 16,800 Other works expenses (10% of wages) Direct expenses accrued on 31403.2019 1,600 Plant installed at cost 1,60,000 Cash received 10,24,000 Materials returned to store 5,600 Retention money 20% Direct expenses 8,000 Cost of uncertified work 9,600 Cost of plant transferred to another contract on 01.07.2018 40,000 Depreciation to be charged on plant @ 15% p.a. Prepare Contract A/c in the books of B. Ltd. And also show the value of WIP. (2018) Ans.: Cost to date: Rs. 10,66,700; Costing P/L Rs. 1,18,880; ‘Contingency Reserve Rs. 104,020; Work in Progress Rs. $%785;020; Depreciation Rs. 19,500. 185,58 17. The following particulars are available in respect of a contract as on 31.03,2019: Rs. Contract price 10,00,000 Total cost of contract till 31.03.2019 5,50,000 Cost of uncertified work 25,000 Cash received (retention money being 15%) 531,250 Compute the amount of profit that may be transferred to Profit & Loss Account and the value of Work-in-progress. {2019} Ans. Costing P/L Rs. 56,667; Work in Progress Rs. 6,06,667. Z, 4, DAA 1 he natotol Pel> Proht ReconciGiatib SdoSerrecs 185 Year Question ~ Practical A From the following data prepare a Reconciliation Statement to find profit as per Financial accounts eS Rs. ¥ Profit as per cost accounts 2,50,000 Works overheads aver-absorbed C+) 20,000 Administration overheads under-absorbed ¢-) 45,000 Under valuation of opening stock in Cost acgountsC#) 15,000 Bad Debt written off during the year C-) 14,000 Preliminary expenses written off du he year(-) 10,000 Ans: Rs, 1.86 000, (2005(G & 4) PF The Trading and Profit & Loss A/c of ABC Ltd. forthe year ended 31.12.2018 were as follows: Dr. Rs cr Rs. To Purchase 42,000 By Sales 143,000 (D), “Direct Wages 20,000 By Closing Stock 2,000 ‘S7/* Manufacturing Overhead 24,000 YY * Gross Prpit cd 58,000 745,000 1, 45,000 To, Administrative Expenses 10,000" By Gross Profit b/d 39,000 “Selling & Distribution Expenses 16,000 * Depreciation 2,000 Net Profit 31,000 59,000 59,000 The following information was available from the Cost-Accounts: Closing stock of goods —Rs. 4,000 b. Manufacturing overhead was applied@ 150% on Direct Wages. ©. Administrative, Selling & Distribution expenses were 10% on sales each. \ Depreciation charged Rs. 2,400, You are required to reconcile the profit of Financial Accounts with that of the Cost-Aecounts, Ans. Rs, 24,000. (2009(4)) Prepare a Reconciliation Statement from the following data Rs, Net loss as per cost Accounts 344,800 SQ, Works overhead under-recovered ip Cost Accounts ¢ 6,240 7 ') Depreciation over charged in Cost Accounts 2,600 ‘ (6) Administration overheads under-charged in Financial Accounts 3,400 \oilnterest on investment 17,500 ©\Goodwill written off in Financial Accounts 11,400 ) Income tax paid 80,600 Ans: Rs. 89990. 1% 01,19, Tos Fe From the following figures, prepare a Reconciliation Statement: ® ¥+ Net profit as per Cost Accounts 2) 7 Net profit as per Financial Accounts a Factory overhead under-recovered in costing (—} Administration overhead recovered in excess | {2012(G)) a a Serer err ErrEr 77m186 Au Depreciation charged in Fancal Account) 20607 9 Depreciation recovered in costing, ( 3,950. Interest received but not included in Cost Accounts (-)) 450 Income Tax provided in Financial books( ~) 230 Stores adjustment (credited in Financial books) (1°) ay Dividend apportioned in Financial Accounts. ¥ 860 Loss due to thet provided only in Financial books ©) oa A# From the following particulars prepare a Reconciliation Statement WY a. Profit as per Cost Accounts was Rs. 1,50,300 4. Works overhead were under-recorded in Cost Accounts Rs, 4,000 @ & Pepreciaton charges were oversecrded in cont Account Rs 1,000 CEL ds Rent received during the year Rs 3,000 SOY e. Bad Debt written off during the year Rs, 2,000 Z ——§, Provision for Income Tax made in Financial Accounts Rs, 20,000 ‘Ans. Rs. 128,300, (2013(G Prepare a reconciliation statement from the following information 4s Particular ‘As per financial records As per cost records Dilleoace 7 Closing stock -)voluahon 8160 3560 AO C-) Factory expenses 24260 21000 260 (-) Ry Office expenses i Asotin 10680 10000 6B (4 Selling expense 14200 15000 goo (4) - Depreciation » cresqea, 2200 1600 6D Rent received 5200 a Ww Net profit : 39540 Ans. Rs, 40,600. (2007; 2013 (H) / 20071G)) ZZ From the following particulars prepare a Reconciliation Statement, Sy % Profit as per Cost Accounts was Rs. 75,150. 7b. Works overhead were under-recorded in Cost Accounts Rs. 2,000(7) c. Depreciation charges were over-recorded in Cost Accounts Rs. 500 C+) (B34. Rent received during the year Rs. 1,500 (+f) Ye Bad Debt written off during the year RS. 1,000(,-) {.- Provision for Income Tax made in Financial Accounts Rs. 10,000" (—) Stores adjustment (credited in Financial Books) Rs. 475. Ct) Ans: Rs. 64,625. {2014(G)} From the following figures, prepare a recor 2, financial books tion statement to determine net profits as per We Rs. ® Net profit as shown the cost books 2,80,000 Depreciation shown excess in cost books 4,000 Interest on investment received 2,000 gO Provision for income tax 80,000 Income received from transfer fees 300 Factory overhead under-recovered in cust books 6,000 Office expenses under-recovery in financial books 2,000 : ‘Ans.: Rs, 2,02,300, ‘ (201516), PP PP LP PLP LPP PPE LE PEEPS IATL AS Ae,Ce 90,000 By Sales (4800 u 66,000 To Works 44,000 ( To Admini 12,000 Qy’ To Net Profit 16,800 v The company’s ‘ord show thi 1 Works overhead have been absorbe b. Administrative overheads have b at R67 per unit produ worbed at Rs3 per ur n Asourning, the 1 opening stock of finished goods, prepare: A Astaten the net profit; and Wan counts 1s Profit as per Cost A/c - Rs. 19,200. ‘AL of cost indi ‘As per financial records Rs. Closing Stock 8610 © ___ Difice expenses 10,680 RNS Factory expenses 24,260 Depreciation 2,200 4 Selling expenses 14,200 Rent received 5.200 Net profit 600 Ans. Profit per the Cost Ale ~ 39,090, om the following data prepare a Reconciliation Statement Financial Accounts: \ 2 The profit as ped Cost Accounts is Rs. 45,200. The following de \iy_ the Cost and Financial accounts Cost Ale Financ PE SELELELELELECUUUULUUUUUEU eer Alc of KB Ltd. For 's nothing by way of work-in-progress either at the beginning or at the 187 31.12.2018, Rs. nits) 192,000 By Closing, Stock (1200 units) 40,800 iced and init produced. end and Hement reconciling the profit as disclosed by cost accounts and that shown in financial (201504) From the following. information, prepare a reconciliation statement As per cost Records Rs. 8560-) 50 10,000 —) Gko 21,000 9) 32k0 1,600) éow 15,000 -) Bes = FSAv 2 {2016(G)) and show the profit or loss as per Rs. i Net profit as per Cost Aécounts 66,760 Factiry on cost under-recovered in cost books 5,700(-) - Administration overhead recovered in excess 4,250 (+) Depreciation charged in financial books 3,660 (4) 9 , Depreciation recovered in costing 3,950. Interest received 450.1) Income tax provided in finaricial books “600 t~) Bank interest credited in financial books 23064) Store adjustment (credited in financial books) pots) Depreciation of stock charged in financial accounts 860 (44 Dividend appropriated in financial accounts 1,200 BR ‘Loss due to theft provided only in financial books 260 (4) (2017080) tails are ascertained on comparison of ial Aleo 188 a Rs. a. Opening stock of Raw Materials. 12,900 14,100 > ast b. Opening Stock of Work in Progress 7,000 7,900 > Pe 7 ©. Closing stock of Raw Materials 15,000, a0 > Wot 4. Closing stock of Work in Progress 6,500 6,100 -) ave e. Closing stock of Finished Gopis 7,500 8,500 -) 10 ( 1! een {Directors fees paid Rs. 1500) ahd Dividend received Rs. 500°Rre exclusively taken i Accounts, but ignored in Cost Accounts. Rent charged in Cost Accounts but not in Financial Accounts Rs. 4800. hh. Preliminary expenses written off Rs. 2,750 but not charged in Cost Accounts. i i. Overhead charged in Financial Accounts Rs. 22,000 but recovered in Cost Accounts Rs Fane Prepare a Reconciliation statement and also ind out profit as per Financial Accounts. Ans Rs. 450° 46,959 the ee cost book of R. Ltd, showed a net profit of Rs. 86,200 for the period 2018-19. A scrutiny of _figures from financial books and cost books revealed the following facts:_(Rs.)_ Works overhead under-recovered 1,560) "Administration overhead over-recovered 850 |(+) © [Depreciation charged in in financial accounts 5,600 |) (50 xy in cost accounts, 6,250 Lo Interest on investment not recorded in cost book 4,000 | (+) Income tax provided in financial accounts: 20,150 | (-) Bank interest and transfer fees recorded only in financial books 375 |C-+) Value of opening stock in : Cost accounts 24800] 00) ancial accounts 26,300 Goodwill written off 5,000 |(~) Loss on sale of furniture 600 | ¢~) Prepare a Profit reconciliation statement. (201940) Ans. Rs, 63,265. : following details have been available from the Financial Account and Cost Account of an X._industrial enterprise. If profit disclosed in Financial Account is Rs. 2,50,000, prepare a Reconciliation statement and find out the profit as per Cost Account. Cost Accounts (Rs.) | Financial Accounts (Rs.) : Rs. Rs. ‘Opening Stock: Des & Materials = 10,000 13500 |3,500C+)| GH) ° B Ay Finished Goods 35,000 30,000 | S985 (Ay b._Closing Stock: Care Y ; Materials 45,000 50,000] S98 G4}]C) Finished Goods 60,000 58,000] Ywol-} lay a. Interest charged in Cost Account but not actually paid and not debited and Loss A/e~Rs. 16,000. f Preliminary expenses written off in Financial Accounts ~ Rs, 1,800 { +) Goodwill written offin Financial Accounts ~Rs.3,000(+) ' Dividend received ~ Rs. 4,000 (-) €. Overhead paid Rs, 89,000 but recovered Rs. 85,000. A950 9 (+) Ans: Rs 234300. 155 = (201916) in Financial profit aos‘Year Question - Practical transaction: Rs. i, Issue of materials: Direct 5,00,000 Indirect 1,00,000 ji, Allocation of wages and salaries © me | Direct labour 120,000 Indirect Factory labour 40,000 Salaries to office staff 90,000 iii. Over-absorption of Factory Overheads Rs. 10,000. FZ From the folowing information, prepare necessary accounts inthe cost edger the cost books for the 180 following, (2006(H)} 3 Opening Balance Rs. Closing Balance Rs. wy © Work-in-progress 3,800 2,500 OS Materia 22,000 use Ry a __ Finished stock 17,000 . | ‘Transactions during the period: . s. Materials purchased 58,000 Direct wages 21,000 Electricity charges 20,000 Factory overhead incurred 27,000 Factory overhead applied 26,000 Selling, distribution and administration expenses incurred 28,000 Selling, distribution and administration expenses charged to finished stock sold 29,000 | Sales : 1,86,000 ‘Ans.: Store ledger A/c Rs. 65,000; Factory O/H A/c Rs. 1,000; WIP Rs. 1,33,300; Finished goods Alc Rs, 1,18 300; Selling O/H A/c 1,000(Cry; Cost Ledger A/c Rs. 2,35,500. The following are the balances in the cost ledger of a manufacturing company of 1 January, 2018 8 1g company y SS Dr. (Rs) Cr. (Rs) a Stores Ledger 9,000 Work-in-progress Ledger 8,000 & Finished Goods ledger 10,000 | 8a Financial Ledger - 27,000 ‘Summary of the transactions during the year 2018 Rs, Materials purchased 15,000 Materials issued to jobs 16,000 Materials issued for repairs in factory 2,000 __ Direct wages paid 10,000 Indirect Wages paid 2,000 Factory Expenses paid 8,000 ) Administration expenses paid 9,000 Selling expenses paid 5,000 Cost of finished goods produced, 40,000 Cost of finished goods sold 535,000 {2007(H)} Me PEP PP PPP PPE PPP PDP RDP PP ples Alls 181 a eee eee Sales outa Prepare Control Accounts and Costing profit and Loss Accounts in the Cost Led the overheads recovered and incurred are the same and that administration overheads net heads are charged to finished goods. (2012G)) Ans: Cost ledger control A/c - RS. 1,06,000; Stores ledger control A/c ~ Rs. 6,000; Works progress control A/c Rs. 6,000; Finished stock ledger control A/e~ Rs. 4,000; Profit Rs. 30000, FETIFT Ss From te lowing information prepa the neces gran inthe ost dg Opening Balance Rs. Closing balance Rs. W ve oO seer areas pre dee t me oA Norn progress control A/c 14,000 18; x wF Finished stock control a/c 16,500 a Following transactions toak place during the period: = ‘ Rs. Materials purchased 47,500 = Direct wages paid 25,000 ~~ (Overhead incurred 12500 Overhead recovered 17,000 = Sales 80,000 > ‘Ans. Cost Ledger Control A/c - Rs. 1,41,000; Store Ledger Control A/c - Rs. 42,500; W.LP Control ew ‘Alc Rs, 80,000; Finished Goods Ledger A/c- Rs. 79,000; Costing P/L-Rs.5,500(Cr). _(2014(H)) wo outing tersnsin be costa mi Cs Cn As Rs. rT) Raw materials purchased 50,000 2 5 \ Direct materials issued to production 30,000 Oy Wages paid (70% Direct) 40,000 1 = VY Manufacturing expenses incurred 30,000 Manufacturing expenses charged to production 40,000 = Selling and distribution expenses incurred 5,000 2 Selling and distribution expenses recovered 4,000 Sales 1,00,000 Sd Ans: (201516) ° ~™ necessary journal entries in cost records for the following: DZ 4, Materials (direct) amounfing to Rs. 42,000 are igsued to production =. QY.p. Depreciation of factory equipment Rs. 9,600 ' NY . Goods completed and transferred to finished stock Rs. 72,000 t D 7% «a. Factory overhead incurred Rs. 15,000 (of which Rs. 3,000 left unpaid) rs Office overhead recovered Rs. 16,000. or6ttn) 2 e Following details are available in the Cost Ledger: 3 Opening Balance Closing Balance a Rs. Rs. Raw materials 8.000 11,000 ~ — Workein-Prowess 5,000 9.00 Finished Goods 10,000 12000 Transactions during the perioda b. Stores Ledger & Factory Overt d. Control Account e. ods Ledger Control {. Costing Profit & Loss A/e Control Account head Control Account Ugnore other overhe Profit & Loss A/c] Ans. Store Ledger Control (Raw 9,000; WIP Ledg 000; Wages 100; Overhead ‘ads and assume that under/over absorbed ow 182 aid (including Rs. 2,000 indirect wages) Rs. 10,000; Factory recovered Rs, 9,000, and Sales Rs. 50,000. Account \ erhead is transferred to Costing (2018(E} Material consumed) Rs, 22,000; Factory Overhead charged Rs. #r Control (Cost of Goods Produced) Rs, 35,000; Finished Goods Ledger (Cost of Goods Sold) Rs. 33,000; Cost osting PML (Profit) Rs. 16,000; Cost Ledger Control (Total) Rs. 82,000. Rs. Materials purchased for stores 25,000 Materials purchased for direct issue 4000 Materials issued for production 23,700 ‘ Factory ovethead absorbed 3,000 ‘Administration Overhead absorbed 1.800 Ans.: PZ Assuming Ron-integrated accounting system, transactions: Sy WH 7 pire following transactions took required to enter the transactions ir Purchase of material . Material Purchased. Direct Materials Indirect Materials Cy b. Wages Paid | Direct Wages Indirect Wages Factory overhead Administration overhead Ans: Issue of material for production Issue of material for repairs and maintenance Direct wages charged to production Stock destroyed by fire! (20186) Pass journal entries inthe cost books forthe following Particulars Amount nl 80,000 50,000 5,000 15,000 4,000 i (2018048), Place for the month of March, 2019 of XYZ Co.'Ltd. You are in Cost books (Under cost control accounting system): Rs, 40,000 5,000 40,000 2,000 Overhead Incurred Overhead Absorbed. Rs. Rs, 50,000 60,000 25,000 20,000 (20191) PPIPVEPIPPPPPPPHPP HPO He He OH OM Owe a ae i idCog Sheed 2 Job Cash coset Le ES ES ion, compute the raw material purchased: Year Question ~ Practical Aro te toting info ® Direct Wages. Factory overhe ed 9 General overhead Cost of production Ans: Rs, 3,00,000. Following isthe Profitand Loss A/c of Ul Re To, Opening stock of raw materials} Yo 20,000 Purchases of raw materials 3PM 1, 30.000 ®pwager 4s 1 90000 QZ © Gross Profit e/a 2,25,000 Boom “i rates & taxes: B&R o/h 20,000 istration expenses 6. fy 1, 00,000 "Selling & distribution expenses & gp gy 45,000 “Preliminary expenses written off,e 8,000 “ Donation x 5,000 “Net profit fd 50,000 2.28,000 The estimate made 4. The production and sales off © The labour cost per fan would go up by 10% 4. OF the manufacturing expenses Rs. 15,000 portion will be in the same pr ©. Administration expenses are year. {Selling and distribution expense: 8 Selling price per fan will decrease by 10%, You are required to prepare to be charged at the SEU LUUUUUTTTUNTAT IIIS SSS showing cos, profit and selling pri Adis: For -2018-19; RMC ~ Rs. 120,000; C~Rs. 3,95,000; COP - Rs. 4,95, i 7 COS* Rs. 540,000; Profit~ Rs 6,000. Selling price per fan - 300, oe | a Rates, CMC Rs 2.1600, PCRs. 513,00; WC Rs. 650600, COP- 4, j 000; 5, = Rs, 882,809; Sales ~ Rs. 8,10,000; Loss — ee ‘toed AY Maohie Lid. turishes the fllowit information in relation to the prod 2 OW Product ‘N’ for the year 2018 Pens a wal 3000 was b The price of material per fan would increase by 20%. > 2,16, 0850 92,99,600 are fixed and the balance are portion of material consumed and wages as in the same respective percentage two separate cost sheets for the per fan and the total cost, tot PC- Rs. 3,00,000; w Ks, 20,000 20,000 2,10,000 60% of dirwet wages of works cost 68,000 (2000) uring, the year ended 31,3,2019, Rs. By Sale 6, 00,000 By Closing Stock of Raw Material Dp (Ley) 30,000 630,000 By Gross profit bd 2, 25,000 "Dividend received % 33,000 2.28,000 variable. The variable Previous year, as in the previous ' per fan would remain unchanged, Years 199899 and 1999-2090 tal profit and total sales,172 -\ 2 | LEP RPIEPIT PREPS PR PPR PPR PDP eee a. Direct material 2,00,000 b. Direct Labour 150,000 c. Indirect wages (50% fixed) 40,000 . Consumable stores (70% variable) 30,000 €. Office rent (100% fixed) 60,000 {Selling expenses (40% variable) 80,000 f material In the year 2019, iis estimated that the production willbe increased by 50%, The PFI HAT and labour will go up by 10% and 20% respectively. You are required to compute selling P! unit of product‘N’ forthe year 2019 if the company wishes to maintain profit @ 10% on cost as ‘Ans. Unit Produce - 3000, PC - Rs. 6,00,000; WC ~ Rs. 6.90500; COP ~ Rs. 7,50,500; ™ a 5 46,500; Profit ~ Rs. 4,650; Selling Price ~ Rs. 9,31,150; Selling Price / unit - 310.383. (20 wn & Co, for the quarter ended From the following particulars indir single output nits ¢ particulars regarding the single output of Anitba oe ‘on 31*December, 2018, prepare (a) a statement of Cost of Production and (b) and state : or’ Loss, assuming weighted of finished goods Average Method is followed by the company for valuation of closing stock: Stock 11.2018 Rs. 31.12.2018 Rs. Raw Material 40,000 50,000 > Work in progress 50,000 | 70,000 Finished Goods 172,000 (4,000 units) (5,000 units) ©) Purchase of Raw Materials 160,000 (>) Direct Labour 110,000 Z/) Chargeable Expenses 40,000 || Machine Hour Rate Rs. 16 per hour CZ9) Machine Hour worked £5,000 hours; |) Office & Administration overhead @ Rs. 4.80 per unit; | Sotling & Ademmistiition overhead +: @Rs.3,00 per unit; Sale of 24,000 units ‘@Rs. 2 per unit What would be the difference in stock value if the company follows EIEO method for valuation of closing stock of finished goods. Ans. (a) RMC ~ Rs. 1,50,000; PC ~ Rs. 3,00,000; WC ~ Rs. 3,60,000; COP — Rs. 4,80,000; (B) Profit — Rs, 95,172; CL. Stock - Rs. 95,172; Cl. Stock under FIFO ~ Rs. 96,000; Sale- Rs. 6,24,000. (2002) ¥ ‘Quotation price of “ JOB No 440” was Rs. 50,000 in the year 2018. A prdfit of 25% on cost was included in the above quotation. From the following information astertain the quotation of “JOB NO 440” for the year 2019: yd a. Material, Labour and overhead were included in the cost of the above job in 3:3:2. b, 200% increase in material cost, 10% increas in labour cost and 5% increase in the overhead cost are expected in the year 2019. Same percentage of profit as charged in 2018 on the quotation price is to be considered. ‘Ans. Rs, 56250. (2003) Dyrom ise souowing data prepare a ost shet ‘Opening stock of Direct Materials Rs. 30,000 8 Closing stock of Direct Materials Rs. 20,000 wy Purchase of direct Materials s.1,96,000 ef Sales Rs. 630,000, / Prime Cost Rs. 410,000,