Find out the memorandum reconciliation account, Cost Accounting

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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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