Please refer to IPCC Study Material on Advanced Accounting. Chapter : Departmental Accounts Illustration No. 2 ( Complex Ltd. )
In the Working Notes on Unrealised Profit On Closing Stock of Dept. B, the Transfer amount received from Dept. A is
Rs. 18,000. How is this figure of Rs. 18,000 arrived at ? Can somebody please explain ?
Thanks and regards.
opening stock of dept A + consumption of dirct material + wages - clsoing stock of dept A = cost of goods sold.
ie . 3000+8000 +5000-4000 = 12000
profit margin of A is 50% on cost .
so transfer from dept A to Dept B is 12000* 150% ie 18000.
hope u undrstud.
KK & Company Chartered Accountant
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