M/s Bright and Co. Had four departments A,B,C and D. Each department being managed by a departmental manager whose commission was 10% of the respective departmental profits, subject to a minimum of $6,000 in each case. Inter departmental transfers took place at a loaded price as follows : From Department A to Department B 10% above cost A to D 20% D 20% C to C to B 20% For the year ended 31st March, 2015 the firm had already prepared and closed the departmental Trading and Profit & Loss Account. Subsequently it was discovered that the closing stocks of departments had included interdepartmentally transferred goods at loaded price of cost price. From the following information prepare a statement recomputing the departmental profit or loss : Deptt. A Deptt. B Deptt. C Deptt. D 50,400 (Profit) ( $22,000 from Deptt. A and $48,000 from Deptt. C) 1,08,000 (Profit) ($3,600 from Deptt. C and $1,200 from Deptt. A) 38,000 (Loss) 72,000 (Profit) Final Profit/Loss Interdepartmental transfers included at loaded price in the departmental Stock

M/s Bright and Co. Had four departments A,B,C and D. Each department being managed by a departmental manager whose commission was 10% of the respective departmental profits, subject to a minimum of $6,000 in each case. Inter departmental transfers took place at a loaded price as follows : From Department A to Department B 10% above cost A to D 20% D 20% C to C to B 20% For the year ended 31st March, 2015 the firm had already prepared and closed the departmental Trading and Profit & Loss Account. Subsequently it was discovered that the closing stocks of departments had included interdepartmentally transferred goods at loaded price of cost price. From the following information prepare a statement recomputing the departmental profit or loss : Deptt. A Deptt. B Deptt. C Deptt. D 50,400 (Profit) ( $22,000 from Deptt. A and $48,000 from Deptt. C) 1,08,000 (Profit) ($3,600 from Deptt. C and $1,200 from Deptt. A) 38,000 (Loss) 72,000 (Profit) Final Profit/Loss Interdepartmental transfers included at loaded price in the departmental Stock

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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