Page 42 - DCOM206_COST_ACCOUNTING_II

Unit 2: Reconciliation of Cost and Financial Accounting

(c) Profit and Loss Account Notes
Particulars Amount (`) Particulars Amount (`)
To Opening stock of finished goods 60,000 By Sales 4,87,500
To Raw materials consumed 1,65,000 By Closing stock of finished goods 15,000
To Direct wages 75,000
To Factory expenses 58,125
To Office expenses 45,750
To Net profit 98,625
5,02,500 5,02,500

Reconciliation Statement
Particulars Amount (`)
Profit as per cost accounts 97,500
Add: Factory expenses overcharged in cost account (` 60,000 – 58,125) 1,875
99,375
Less: Office expenses under charged in cost account (` 45,750 – ` 45,000) 750
Profit as per Financial Accounts 98,625

Problem 5:
The financial profit and loss account of XYZ Manufacturing Company for the year ended 31st
December, 2008 is as follows:

Particulars ` Particulars `
To Materials consumed 80,000 By Sales 1,98,400
To Carriage inward 1,600
To Wages 54,400
To Factory expenses 19,200
To Administrative expenses 7,200
To Selling & Distribution exp. 10,400
To Debenture interest 1,600
To Net profit 24,000
1,98,400 1,98,400

The net profit shown by cost accounts for the year is ` 26,032. Upon detailed examination, the
following facts were revealed:
(i) About the overheads, the following amounts were charged in cost accounts:
Factory overheads ` 18,400

Office overheads ` 7,344
Selling and distribution overheads ` 10,624
(ii) No amount has been charged in the cost accounts regarding the debenture interest. Reconcile
the profits as shown by the two sets of books.

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