Departmental accounts

IPCC 1228 views 1 replies

Sumanta Das Gupta

Accountant

310 Points Joined August 2011

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.

Replies (1)

Guest

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.