In: Accounting
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
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. |