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
|