Department R sells goods to Department S at a profit of 25% on cost and Department T at 10% profit on cost. Department S sells goods to R and T at a profit of 15% and 20% on sales respectively. Department T charges 20% and 25% profit on cost to Department R and S respectively. Department manages are entitled to 10% commission on net profit subject to unrealized profit on departmental sales being eliminated. Departmental profits after charging manager's commission, but before adjustment of unrealized profit, are as under : Department $ 54,000; Department S $ 40,500 ; Department T$ 27,000. Stocks lying at different departments at the end of the year are as under : Deptt. R Deptt. S Deptt. T Transfer from Department R 22,500 16,500 Transfer from Department S 21,000 18,000 Transfer from Department T 9,000 7,500 Find out the correct departmental profits after charging manager's commission.

Department R sells goods to Department S at a profit of 25% on cost and Department T at 10% profit on cost. Department S sells goods to R and T at a profit of 15% and 20% on sales respectively. Department T charges 20% and 25% profit on cost to Department R and S respectively. Department manages are entitled to 10% commission on net profit subject to unrealized profit on departmental sales being eliminated. Departmental profits after charging manager's commission, but before adjustment of unrealized profit, are as under : Department $ 54,000; Department S $ 40,500 ; Department T$ 27,000. Stocks lying at different departments at the end of the year are as under : Deptt. R Deptt. S Deptt. T Transfer from Department R 22,500 16,500 Transfer from Department S 21,000 18,000 Transfer from Department T 9,000 7,500 Find out the correct departmental profits after charging manager's commission.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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