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F2 Dept (N)

This document contains 4 problems involving the preparation of departmental financial statements. Problem 1 provides departmental balances for Taylor with 2 departments and asks to prepare income statements for each department and a combined balance sheet. Problem 2 provides a trial balance for P&Co with 2 departments and asks to prepare departmental trading and profit/loss accounts and a balance sheet. Problem 3 provides production and sales data for 3 product varieties of XYZ Mills and asks to prepare a departmental trading account. Problem 4 provides financial data for 3 departments of Departmental Store Ltd and asks to prepare a statement showing gross profit for each department.

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55 views3 pages

F2 Dept (N)

This document contains 4 problems involving the preparation of departmental financial statements. Problem 1 provides departmental balances for Taylor with 2 departments and asks to prepare income statements for each department and a combined balance sheet. Problem 2 provides a trial balance for P&Co with 2 departments and asks to prepare departmental trading and profit/loss accounts and a balance sheet. Problem 3 provides production and sales data for 3 product varieties of XYZ Mills and asks to prepare a departmental trading account. Problem 4 provides financial data for 3 departments of Departmental Store Ltd and asks to prepare a statement showing gross profit for each department.

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aslamhamza949
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Problem NO.

1:
The following balances as at 31-12-2022 have been extracted from the books of Taylor. which has
two departments.

Particulars Department A Department B

Opening Stock 25,000 20,000


Purchases 2,30,000 1,90,000
Purchases Returns 2,000 1,000
Sales 6,33,000 4,92,000
Sales Return 3,000 2,000
Wages 180,000 1,60,000
Miscellaneous Charges 35,000 32,000

Sundry Debtors - 1,90,000; Sundry Creditors - 1,73,000, Plant and Machinery - 2,40,000;
Leaseholds - 80,000; Buildings -1,20,000; Furniture and Fittings - 48,000; Office and Selling
Expenses – 1,28,000; Cash in hand 8,000; Cash at Bank 1,10,000, Capital 5,00,000.

Plant and machinery to be on by 10%, building by 2%, Furniture and Fittings by 5%. Leaseholds
are to be written-off by 8,000. The stock on hand as on 31-12-2022, Department A 26,000.
Department B - 24,000 All unallocated expenditure is to be apportioned in the ratio of the net sales
of each department.

Prepare in columnar form, the Statement of Comprehensive Income of two departments and
Financial Position of the combined business as a whole on 31-12-2022.
Problem NO. 2:
From the following Trial Balance, prepare Departmental Trading and Profit and Loss Account for
the year ended 31-12-2010 and a Balance Sheet as on date in the books of P & Co. All figures in
dollars.

Particulars Debir Credit


Stock 1-1-2022 Dept A 5,400
Dept B 4,900
Purchases- Dept A 9,800
Dept B 7,350
Sales Dept A 16,900
Dept B 13,520
Wages Dept A 1,340
Dept B 240
Rent 1870
Salaries 1320
Lighting and Heating 420
Discount Allowed 441
Discount Received 133
Advertising 738
Carriage Inward 469
Furniture and fittings 600
Plant and machinery 4,200
Sundry Debtors 1,820
Sundry Creditors 3,737
Capital 9,530
Drawing 900
Cash in hand 32
Cash at Bank 1980

The following information is also provided:

(a) Rent, lighting and heating, salaries and depreciation are to be apportioned to A and B
Departments as 2:1.

(b) Other expenses and incomes are to be apportioned to A and B Departments on suitable basis

(c) The following adjustments are to be made.

Rent pre-paid 30; Lighting and heating outstanding 180; and Depreciation of Furniture & Fittings
and Plant & Machinery @ 10% р.а.
(d) The stock at 31-12-2022; Department A - 2,748; Department B - 2,401.

Problem NO. 3:
XYZ Mills produces three varieties of products. Sona, Mona and Dona. The cost of production
during 2022 of these varieties amounted to Rs. 8,00,000. Output during the year were. Sona-4,000
units, Mona-8,000 units and Dona-9,600 units.
Stock on 1 January, 2022 were: Sona 450 units, Mona - 300 units and Dona- 600 units Sales during
the year were Sona - 4,100 units @ Rs. 48 each; Mona-7,700 units @ Rs. 54 each and Dona -
10,000 units @ Rs. 60 each. The rate of gross profit is the same in each case.
Prepare Departmental Trading Account.

Problem NO. 4:
The Directors of Departmental Store Ltd., wish to ascertain approximately the net profits of the
'A', 'B' and 'C' departments separately for the quarter ended March 31, 2010. It is found an adequate
system of departmental impracticable actually stock on that date but accounting is in use and the
normal rates of gross profit for the departments concerned are 40% 30% and 20% on turnover
respectively. Indirect expenses are charged in portion to departmental turnover.

Following are the figures for each department.


Particulars Department A Department B Department C
Stock on 1-1-2023 30,000 35,000 15,000
Purchases 35,000 37,500 23,500
Sales 60,000 50,000 30,000
Direct expenses 10,100 7,250 3,550

Total indirect expenses for the period (including those relating to other departments) were Rs.
21,000 and total sales of Rs. 4.20.000.
Prepare a statement showing gross profit after making reserve for stock at 10% in respect of each
department.

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