Find out the memorandum reconciliation account, Cost Accounting

Find Out the Memorandum Reconciliation Account

The givens are the final accounts of a company for the year ending on date 31st December 1999. Manufacturing Trading Loss and Profit Appropriation Account as:

Total Factory Costs c/d	311,000	Sales	480,000
Finished Goods: opening stock	20,000
Cost of Goods Manufactured
And Transferred b/d	311,000
	331,000
Less Closing stock	(22,000)
	309,000
Gross Profit c/d	171,000		______
	480,000		480,000
Expenses
Office Salaries:	35,000	Gross Profit b/d	171,000
Office Expenses:	20,000	Dividends Received	3,000
Salesman Commissions	18,000	Interest on Bank Deposits	1,000
Selling Expenses:	15,000
Loss on sale of land	1,000
Distribution Expenses	13,000
Interest on Mortgage	2,000
Fines	1,000
Net Profit c/d	70,000		______
	175,000		175,000
Taxation	24,000	Net Profit b/d	70,000
Transfers to General Reserve	9,000	Retained Earnings b/f	36,000
Ordinary share dividend	18,000
Preference Dividends	11,000
Goodwill written off	37,000		_______
	106,000		106,000
		Retained Profit b/f	37,000

Additional Information

1. The cost accounting records appears as given:

2. Profits were shs.114, 000. Office expenses and office salaries provided for as in the financial books

(i) Opening Stocks:

Raw Materials 26,000

Work in Progress 21,000

Finished Goods 23,000

(ii) Closing Stocks: Raw Materials 30,000

Work in Progress 20,000

Finished Goods 24,000

Required

Prepare a memorandum Reconciliation account.

Solution

Memorandum Reconciliation Account as:

		Profits as Per Cost Books		114,000
Items not Debited in Cost A/Cs		Items not Credited in Cost A/Cs
Stock Differences: Opening Stocks		Dividends Received	3,000
Of Raw Materials	1,000	Interest Received	1,000
Loss on Sale of Plant	1,000	Differences in Stocks
Fines	1,000	W.I.P. (Opening Stocks)	2,000
Interest on Mortgage	2,000	Opening Finished Goods	3,000
Selling Expenses	15,000	W.I.P: Closing stocks	1,000
Salesman Commission	18,000		10,000
Distribution Expenses	13,000
Stock Differences:
Raw Materials: Closing	1,000
Finished Goods: Closing	2,000
Net Profit as Per the Financial Books:	70,000			______
	124,000			124,000

Working

	Financial A/Cs	Cost A/Cs	Differences
Work in Progress: Opening Stocks:	29,000	21,000	2,000
Finished Goods: Opening Stocks:	20,000	23,000	3,000
Raw Materials: Opening Stocks:	27,000	26,000	1,000
Closing Stocks:
Work in Progress:	21,000	20,000	1,000
Finished Goods:	22,000	24,000	2,000
Raw Materials:	29,000	30,000	1,000

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