ILLUSTRATION 6 A manufacturing company has disclosed net loss of $48,700 as per their cost accounting records for the year ended 31t March, 2019. However their financial accounting records disclosed net profit of $5,400 for the same period. A scrutiny of data of both the sets of books of accounts revealed the following informations : (i) Factory Overheads Under Absorbed 30,500 (ii) Administrative Overheads Over Absorbed 65,000 |(iii) Depreciation Charged in Financial Accounts (iv) Depreciation Charged in Cost Accounts 2,25,000 2,70,000 (v) Income-tax Provision 52,400 (vi) Transfer Fee (Credited in Financial Accounts) 10,200 (vii) Obsolescence Loss Charged in Financial Accounts 20,700 (viii) Notional Rent of Own Premises charged in Cost Accounts (ix) Value of Opening Stock : (a) in Cost Accounts 54,000 1,38,000 (b) in Financial Accounts 1,15,000 (x) Value of Closing Stock : (a) In Cost Accounts 1,22,000 (b) In Financial Accounts 1,12,500 Prepare a Memorandum Reconciliation Account by taking costing loss as base.

ILLUSTRATION 6 A manufacturing company has disclosed net loss of $48,700 as per their cost accounting records for the year ended 31t March, 2019. However their financial accounting records disclosed net profit of $5,400 for the same period. A scrutiny of data of both the sets of books of accounts revealed the following informations : (i) Factory Overheads Under Absorbed 30,500 (ii) Administrative Overheads Over Absorbed 65,000 |(iii) Depreciation Charged in Financial Accounts (iv) Depreciation Charged in Cost Accounts 2,25,000 2,70,000 (v) Income-tax Provision 52,400 (vi) Transfer Fee (Credited in Financial Accounts) 10,200 (vii) Obsolescence Loss Charged in Financial Accounts 20,700 (viii) Notional Rent of Own Premises charged in Cost Accounts (ix) Value of Opening Stock : (a) in Cost Accounts 54,000 1,38,000 (b) in Financial Accounts 1,15,000 (x) Value of Closing Stock : (a) In Cost Accounts 1,22,000 (b) In Financial Accounts 1,12,500 Prepare a Memorandum Reconciliation Account by taking costing loss as base.

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Description: ILLUSTRATION 6A manufacturing company has disclosed net loss of $48,700 as per their cost accounting records forthe year ended 31t“ March, 2019. However their financial accounting records disclosed net profit of$5,400 for the same period. A scrutiny

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10MC: Shannon Corporation began operations on January 1, 2019. Financial statements for the years ended...

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