Cost Accounting Question. The profit shown in the financial accounts is Shs. 18,592 and for the...

Cost Accounting Question.

The profit shown in the financial accounts is Shs. 18,592 and for the same period, the cost accounts showed a profit of 20,496. Comparison of the two sets of accounts revealed the following:

Stock Valuations:	Cost Accounts	Financial Accounts
Raw Materials	Shs	Shs
Opening Stock	6,841	7,269
Closing Stock	5,493	5,148
Finished Goods
Opening stock	13,281	12,915
Closing stock	11,410	11,141

Dividends and interest received of Shs.572 and a loss of 1,950 on the sale of a milling machine were not entered in the cost accounts

Required: Prepare a reconciliation of the two profits

Expert Solution

RECONCILIATION STATEMENT

Profit as per Financial Account		18,592

Add :-
Difference in Closing Stock of Finished Goods		269
Difference in Closing Stock of Raw Materials		345
Difference in Opening Stock of Raw Materials		428
Loss on sales of Machinery		1,950

Less:-

Difference in Opening Stock of Finished Goods		-366
Interest received		-572

Profit as per Cost Account		20,646

But profit given as per cost account		20,496
Remarks :- Some information of 150 is missing.

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