Accountancy NEB Class 12 2078 question paper

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1. 120783 marksHideAnswer

   State any three features of private company limited.

   Features of a private limited company (any three): 1. Restricted membership: minimum 1 and maximum 101 members as per the Companies Act. 2. Restricted transfer of shares: shares cannot be freely transferred. 3. No public invitation: it c...

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2. 220782 marksHideAnswer

   Define share capital.

   Share capital is the total amount of capital raised by a company through the issue of shares. It is the fund contributed by the shareholders (owners) of the company and is shown under the head "Share Capital" on the liabilities side of the balance sheet. It may be classified as authorised, issued, subscribed, called-up and paid-up capital.

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3. 320783 marksHideAnswer

   Mention the reasons why a shareholder takes interest to analyse the financial statement.

   Reasons a shareholder analyses financial statements:

   1. To know the profitability and earning capacity of the company and the safety of the dividend.
   2. To assess the financial position and solvency, that is the safety of their invested capital.
   3. To judge the growth and future prospects before deciding whether to hold, buy more or sell their shares.

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4. 420782 marksHideAnswer

   Clarify the meaning of funds flow statement.

   A funds flow statement is a statement that shows the sources from which funds (working capital) were obtained and the uses to which they were applied during a period between two balance sheet dates. It highlights the changes in the financial position and the movement of funds of a business.

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5. 520783 marksHideAnswer

   Write in brief any three differences between Cost Accounting and Financial Accounting.

   Cost accounting vs Financial accounting (any three): Basis Cost accounting Financial accounting --------- Purpose To ascertain and control cost To find out overall profit and financial position Users Internal management External parties ...

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6. 620782 marksHideAnswer

   Write the meaning of controllable cost with a suitable example.

   Controllable cost is a cost that can be influenced or regulated by the action of a specific person or level of management within a given period. Example: direct material, direct labour and indirect expenses like stationery, which a departmental manager can control. (Costs such as factory rent that a manager cannot influence are uncontrollable costs.)

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7. 720783 marksHideAnswer

   Mention any three duties of a storekeeper.

   Duties of a storekeeper (any three):

   1. To receive and inspect materials and to arrange their proper storage.
   2. To issue materials only against duly authorised material requisitions.
   3. To maintain proper records (Bin Cards) and keep the stock within the maximum and minimum levels.
   4. To prevent loss, damage and pilferage and to inform the purchase department when stock reaches the reorder level.

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8. 820782 marksHideAnswer

   Clarify the meaning of apportionment of overhead.

   Apportionment of overhead is the process of distributing common overhead expenses, which cannot be identified with a single department, among several departments or cost centres on a suitable and equitable basis (such as floor area, number of employees or value of machinery). It is done when an overhead is jointly incurred for more than one department.

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9. 920786 marksNumericalHideAnswer

   The following information is given relating to issue of shares of a company limited: (i) Issued 10,000 shares of Rs.100 per share (ii) Applications received 16,000 shares (iii) Payable per share: on Application Rs.40; on Allotment Rs.30; First and final call Rs.30 (iv) Pro-rata allotment: 6,000 applicants - full; 8,000 applicants - 4,000 shares; 2,000 applicants - Nil (v) All excess amount paid on application is to be adjusted against amount due on allotment and subsequent calls (vi) 200 shares allotted to a shareholder were forfeited as he failed to pay first and final call. Required: Journal entries for allotment, first and final call and forfeiture.

   Pro-rata: 8,000 applicants get 4,000 shares.

   $$ \begin{aligned} \text{Application received from them} &= 8{,}000 \times \text{Rs.}40 \ &= \text{Rs.}3{,}20{,}000 \end{aligned} $$

   due on 4,000 shares = Rs.1,60,000; excess Rs.1,60,000.

   $$ \begin{aligned} \text{Allotment due on all 10,000} &= 10{,}000 \times \text{Rs.}30 \ &= \text{Rs.}3{,}00{,}000 \end{aligned} $$

   The excess Rs.1,60,000 covers allotment Rs.1,20,000 (on the 4,000 pro-rata shares) and the remaining Rs.40,000 carries to the first & final call. 2,000 applicants (Nil) refunded:

   $$ \begin{aligned} 2{,}000 \times \text{Rs.}40 &= \text{Rs.}80{,}000 \ \text{Allotment received} &= 3{,}00{,}000 - 1{,}20{,}000,(\text{adjusted}) \ &= \text{Rs.}1{,}80{,}000 \ \text{First & final call due} &= 10{,}000 \times \text{Rs.}30 \ &= \text{Rs.}3{,}00{,}000 \end{aligned} $$

   less carried-forward excess Rs.40,000 -> receivable in cash Rs.2,60,000.

   Forfeiture (200 pro-rata shares): the holder applied for 400 shares (ratio 8,000:4,000 = 2:1) and paid application:

   $$ \begin{aligned} 400 \times \text{Rs.}40 &= \text{Rs.}16{,}000 \end{aligned} $$

   Of this, Rs.8,000 is application on the 200 allotted shares and Rs.8,000 is excess; the excess covers allotment Rs.6,000 (200 $\times$ Rs.30) and Rs.2,000 of the call. So on these 200 shares:

   $$ \begin{aligned} \text{the amount received/adjusted towards capital} &= \text{application Rs.}8{,}000 + \text{allotment Rs.}6{,}000 + \text{call Rs.}2{,}000 \ &= \textbf{Rs.}16{,}000 \end{aligned} $$

   and only Rs.4,000 of the call:

   $$ \begin{aligned} 200 \times \text{Rs.}30 &= \text{Rs.}6{,}000 \end{aligned} $$

   less Rs.2,000 met from excess, remains unpaid in cash.

   $$ \begin{aligned} \text{Capital called up on these shares} &= 200 \times \text{Rs.}100 \ &= \text{Rs.}20{,}000 \end{aligned} $$

   Journal entries

   Particulars	Dr (Rs.)	Cr (Rs.)
   Share Allotment A/c ................ Dr	3,00,000
   $\quad$ To Share Capital A/c		3,00,000
   (Allotment due on 10,000 shares @ Rs.30)
   Bank A/c ................................. Dr	1,80,000
   $\quad$ To Share Allotment A/c		1,80,000
   (Allotment received after adjusting excess Rs.1,20,000)
   Share First & Final Call A/c .... Dr	3,00,000
   $\quad$ To Share Capital A/c		3,00,000
   (Call due on 10,000 shares @ Rs.30)
   Bank A/c ................................. Dr	2,56,000
   Calls in Arrear A/c .................. Dr	4,000
   $\quad$ To Share First & Final Call A/c		2,60,000
   (Call received; Rs.40,000 excess adjusted; cash unpaid on 200 sh)
   Share Capital A/c .................... Dr	20,000
   $\quad$ To Share Forfeiture A/c		16,000
   $\quad$ To Calls in Arrear A/c		4,000
   (200 shares of Rs.100 forfeited; Rs.16,000 received/adjusted towards capital, Rs.4,000 call unpaid)

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10. 1020783 marksNumericalHideAnswer

    A company limited issued 5,000 shares of Rs.100 each at a premium of 10% payable as follows: on Application Rs.50; on Allotment Rs.60. Applications were received for all the shares and call money was duly received. Required: Entries for application and allotment.

    $$ \begin{aligned} \text{Premium} &= 10% \text{ of } \text{Rs.}100 \ &= \text{Rs.}10 \end{aligned} $$

    Allotment Rs.60 includes premium Rs.10, so allotment towards capital = Rs.50.

    $$ \begin{aligned} \text{Application Rs.}50 + \text{Allotment Rs.}60 &= \text{Rs.}110 \ &= \text{Rs.}100 \text{ capital} + \text{Rs.}10 \text{ premium} \end{aligned} $$

    Journal entries

    Particulars	Dr (Rs.)	Cr (Rs.)
    Bank A/c ................................. Dr	2,50,000
    $\quad$ To Share Application A/c		2,50,000
    (Application on 5,000 shares @ Rs.50)
    Share Application A/c ............. Dr	2,50,000
    $\quad$ To Share Capital A/c		2,50,000
    (Application money transferred to capital)
    Share Allotment A/c ................ Dr	3,00,000
    $\quad$ To Share Capital A/c		2,50,000
    $\quad$ To Share Premium A/c		50,000
    (Allotment due incl. premium on 5,000 shares)
    Bank A/c ................................. Dr	3,00,000
    $\quad$ To Share Allotment A/c		3,00,000
    (Allotment received)

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11. 1120783 marksNumericalHideAnswer

    X Co. Ltd. took over the following assets and liabilities of Y Co. Ltd. at an agreed price of Rs.7,20,000: Furniture Rs.1,50,000; Machinery Rs.5,00,000; Stock Rs.2,50,000; Creditors Rs.40,000; Loan Rs.20,000. X Co. Ltd paid Rs.7,20,000 for purchase consideration by issuing shares of Rs.100 each at 10% discount. Required: Entries for purchase of assets and liabilities without narration.

    $$ \begin{aligned} \text{Net assets} &= (\text{Furniture }1{,}50{,}000 + \text{Machinery }5{,}00{,}000 + \text{Stock }2{,}50{,}000) - (\text{Creditors }40{,}000 + \text{Loan }20{,}000) \ &= \text{Rs.}8{,}40{,}000 \end{aligned} $$

    Purchase consideration Rs.7,20,000, so the excess of net assets over price = Capital Reserve Rs.1,20,000.

    Shares issued at Rs.90 (Rs.100 - 10% discount):

    $$ \begin{aligned} \text{No.} &= 7{,}20{,}000 / 90 \ &= \textbf{8,000 shares},(\text{Capital Rs.}8{,}00{,}000; \text{Discount Rs.}80{,}000) \end{aligned} $$

    Journal entries

    Particulars	Dr (Rs.)	Cr (Rs.)
    Furniture A/c .......................... Dr	1,50,000
    Machinery A/c ......................... Dr	5,00,000
    Stock A/c ................................ Dr	2,50,000
    $\quad$ To Creditors A/c		40,000
    $\quad$ To Loan A/c		20,000
    $\quad$ To Capital Reserve A/c		1,20,000
    $\quad$ To Vendor A/c		7,20,000
    Vendor A/c .............................. Dr	7,20,000
    Discount on Issue of Shares A/c Dr	80,000
    $\quad$ To Share Capital A/c		8,00,000

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12. 1220784 marksNumericalHideAnswer

    Parbat Co. Ltd. issued 5,000, 10% debentures of Rs.100 each at a premium of 10% to be redeemed at a discount of 5% after 5 years. Required: Entries for issued and redemption of debentures.

    $$ \begin{aligned} \text{Face value} &= 5{,}000 \times \text{Rs.}100 \ &= \text{Rs.}5{,}00{,}000 \ \text{Premium on issue} &= 10% \ &= \text{Rs.}50{,}000 \end{aligned} $$

    so cash received = Rs.5,50,000. Redeemed at 5% discount, so:

    $$ \begin{aligned} \text{amount paid} &= \text{Rs.}5{,}00{,}000 - 5% \ &= \text{Rs.}4{,}75{,}000 \end{aligned} $$

    (profit on redemption Rs.25,000).

    Journal entries

    Particulars	Dr (Rs.)	Cr (Rs.)
    Bank A/c .................................. Dr	5,50,000
    $\quad$ To 10% Debentures A/c		5,00,000
    $\quad$ To Premium on Issue of Debentures A/c		50,000
    (Issue of 5,000 debentures at 10% premium)
    10% Debentures A/c .................. Dr	5,00,000
    $\quad$ To Debenture-holders A/c		4,75,000
    $\quad$ To Profit on Redemption A/c		25,000
    (Amount due on redemption at 5% discount)
    Debenture-holders A/c .............. Dr	4,75,000
    $\quad$ To Bank A/c		4,75,000
    (Payment on redemption)

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13. 1320788 marksNumericalHideAnswer

    The Trial Balance of a company: Debit - Salary 20,000; General Expenses 10,000; Current Assets 40,000; Fixed Assets 1,50,000; Stationery 5,000 (Total 2,25,000). Credit - Capital 1,00,000; Current Liabilities 40,000; Service Revenue 70,000; Other income 10,000; Advance income 5,000 (Total 2,25,000). Additional: (i) Depreciate 10% on fixed assets (ii) Other income earned but not yet received Rs.2,000. Required: (a) Adjustment Entries (b) Worksheet.

    Adjustment entries

    Particulars	Dr (Rs.)	Cr (Rs.)
    Depreciation A/c ...................... Dr	15,000
    $\quad$ To Fixed Assets A/c		15,000
    Accrued Income A/c .................. Dr	2,000
    $\quad$ To Other Income A/c		2,000

    Work Sheet

    Account	TB Dr	TB Cr	Adj Dr	Adj Cr	Inc. Stmt Dr	Inc. Stmt Cr	Bal Sheet Dr	Bal Sheet Cr
    Salary	20,000				20,000
    General expenses	10,000				10,000
    Current assets	40,000						40,000
    Fixed assets	1,50,000			15,000			1,35,000
    Stationery	5,000				5,000
    Capital		1,00,000						1,00,000
    Current liabilities		40,000						40,000
    Service revenue		70,000				70,000
    Other income		10,000		2,000		12,000
    Advance income		5,000						5,000
    Depreciation			15,000		15,000
    Accrued income			2,000				2,000
    Total	2,25,000	2,25,000	17,000	17,000	50,000	82,000	1,77,000	1,45,000
    Net Profit					32,000			32,000
    					82,000	82,000	1,77,000	1,77,000

    Net Profit = Rs.32,000; Balance Sheet total = Rs.1,77,000.

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14. 14207812 marksNumericalHideAnswer

    The Trial Balance of a company at year end: Debit - Opening stock 20,000; Purchase 1,00,000; Wages 50,000; Salary 30,000; Machinery 1,50,000; Debtors 40,000; Rent 12,000; Cash 45,000; Other Expenses 20,000; Furniture 51,000 (Total 5,18,000). Credit - Sales 2,50,000; Capital 2,00,000; Purchase Returns 10,000; Reserve Fund 8,000; Creditors 35,000; Commission 5,000; Profit & Loss Account 10,000 (Total 5,18,000). Additional: (i) Closing stock Rs.25,000 (ii) Depreciate 10% on Machinery and Furniture (iii) Outstanding salary Rs.5,000 (iv) Provision for bad debts 5% (v) Proposed Dividend 5%. Required: (i) Trading Account (ii) Profit and Loss Account (iii) Profit and Loss Appropriation Account (iv) Balance Sheet.

    Trading Account

    Dr	Rs.	Cr	Rs.
    To Opening stock	20,000	By Sales	2,50,000
    To Purchases (1,00,000 - 10,000)	90,000	By Closing stock	25,000
    To Wages	50,000
    To Gross Profit c/d	1,15,000
    Total	2,75,000	Total	2,75,000

    Profit and Loss Account

    Dr	Rs.	Cr	Rs.
    To Salary (30,000 + 5,000)	35,000	By Gross Profit b/d	1,15,000
    To Rent	12,000	By Commission	5,000
    To Other Expenses	20,000
    To Depreciation - Machinery (10% of 1,50,000)	15,000
    To Depreciation - Furniture (10% of 51,000)	5,100
    To Provision for bad debts (5% of 40,000)	2,000
    To Net Profit c/d	30,900
    Total	1,20,000	Total	1,20,000

    Profit and Loss Appropriation Account

    Dr	Rs.	Cr	Rs.
    To Proposed Dividend (5% of 2,00,000)	10,000	By Balance b/d	10,000
    To Balance c/d	30,900	By Net Profit b/d	30,900
    Total	40,900	Total	40,900

    Balance Sheet

    Liabilities	Rs.	Assets	Rs.
    Capital	2,00,000	Machinery (1,50,000 - 15,000)	1,35,000
    Reserve Fund	8,000	Furniture (51,000 - 5,100)	45,900
    Creditors	35,000	Debtors (40,000 - 2,000)	38,000
    Outstanding Salary	5,000	Closing Stock	25,000
    Proposed Dividend	10,000	Cash	45,000
    P&L Appropriation A/c	30,900
    Total	2,88,900	Total	2,88,900

    Balance Sheet total = Rs.2,88,900 (tallied).

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15. 1520785 marksNumericalHideAnswer

    Following information are provided: Inventory Rs.10,000; Debtors Rs.15,000; Cash Balance Rs.5,000; Creditors Rs.15,000; Gross Profit Rs.15,000; Debtors Turnover Ratio 4 times. Required: (i) Current Ratio (ii) Quick Ratio (iii) Sales Amount (iv) Gross profit Ratio.

    $$ \begin{aligned} \text{Current Assets} &= \text{Inventory }10{,}000 + \text{Debtors }15{,}000 + \text{Cash }5{,}000 \ &= \text{Rs.}30{,}000 \end{aligned} $$

    Current Liabilities = Creditors Rs.15,000.

    (i) Current Ratio = CA / CL $$ \begin{aligned} &= \frac{30{,}000}{15{,}000} \ &= 2 : 1 \end{aligned} $$

    (ii) Quick Ratio = (CA - Inventory) / CL $$ \begin{aligned} &= \frac{20{,}000}{15{,}000} \ &= 1.33 : 1 \end{aligned} $$

    (iii) Sales Amount:

    $$ \begin{aligned} \text{Debtors turnover} &= \text{Sales} / \text{Debtors} \ &= 4 \ \text{Sales} &= 4 \times 15{,}000 \ &= \text{Rs.}60{,}000 \end{aligned} $$

    (iv) Gross Profit Ratio = Gross Profit / Sales $\times$ 100 $$ \begin{aligned} &= \frac{15{,}000}{60{,}000} \times 100 \ &= 25% \end{aligned} $$

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16. 1620785 marksNumericalHideAnswer

    The information are given (Last Year / Current Year): Share capital 3,00,000 / 4,50,000; 12% Debentures 1,50,000 / 50,000; Net Profit 30,000 / 50,000; Patent 5,000 / 2,000. Additional: (a) Dividend paid in current year Rs.10,000 (b) Depreciation in current year Rs.12,000 (c) Fixed assets purchased in current year Rs.40,000. Required: (i) Funds from operation (ii) Funds flow statement.

    (i) Funds From Operation Particulars Rs. ------ Closing balance of Net Profit (P&L A/c) 50,000 Add: Patent written off (5,000 - 2,000) 3,000 Add: Depreciation 12,000 Add: Dividend paid 10,000 Less: Opening balance of Net Profit (30,000) ...

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17. 17207810 marksNumericalHideAnswer

    The comparative balance sheet of a company for two years (2019 / 2020): Liabilities - Share Capital 3,00,000 / 5,00,000; 16% Bank Loan 2,00,000 / 50,000; Retained Earnings 80,000 / 1,00,000; Creditors 50,000 / 80,000; Outstanding Expense 20,000 / 30,000. Assets - Fixed Assets 3,00,000 / 4,00,000; Stock 1,20,000 / 1,30,000; Debtors 2,00,000 / 1,80,000; Bank Balance 30,000 / 50,000. Additional: (a) Sales Revenue Rs.4,00,000 (b) Cost of sales Rs.2,00,000 (c) Other administrative expenses Rs.1,00,000 (d) Dividend paid Rs.80,000 (e) Purchase of fixed assets Rs.1,00,000. Required: Cash flow statement by using direct method.

    Cash Flow Statement (Direct Method)

    Particulars	Rs.	Rs.
    A. Operating Activities
    Cash received from customers (4,00,000 + 20,000 dec. debtors)	4,20,000
    Less: Cash paid to suppliers (2,00,000 + 10,000 inc. stock - 30,000 inc. creditors)	(1,80,000)
    Less: Administrative expenses paid (1,00,000 - 10,000 inc. o/s exp.)	(90,000)
    Net cash from operating activities		1,50,000
    B. Investing Activities
    Purchase of fixed assets	(1,00,000)
    Net cash used in investing activities		(1,00,000)
    C. Financing Activities
    Issue of share capital (5,00,000 - 3,00,000)	2,00,000
    Repayment of bank loan (2,00,000 - 50,000)	(1,50,000)
    Dividend paid	(80,000)
    Net cash used in financing activities		(30,000)
    Net increase in cash (A + B + C)		20,000
    Add: Opening bank balance		30,000
    Closing bank balance		50,000

    Closing bank Rs.50,000 agrees with the balance sheet.

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18. 1820785 marksNumericalHideAnswer

    The following transactions are related to the store for the month of Falgun: Falgun 1 Opening stock 800 units @ Rs.5; Falgun 4 Purchase 1,000 units @ Rs.7 each; Falgun 8 Issued 1,000 units; Falgun 12 Returned from work place 50 units; Falgun 18 Purchase 900 units @ Rs.8 each; Falgun 25 Issued 500 units; Falgun 30 Shortage in physical inspection 20 units. Required: Store ledger Account under First-in-First Out (FIFO) method.

    Return from work place (Falgun 12) is valued at the last issue rate Rs.7 and placed at the head of the FIFO queue.

    Store Ledger (FIFO Method) (amounts in Rs.)

    Date	Receipt (Qty/Rate/Amt)	Issue (Qty/Rate/Amt)	Balance
    Fal 1	Opening		800 @ 5 = 4,000
    Fal 4	1,000 @ 7 = 7,000		800 @ 5; 1,000 @ 7 = 11,000
    Fal 8		800 @ 5; 200 @ 7 = 5,400	800 @ 7 = 5,600
    Fal 12	50 @ 7 = 350 (return)		850 @ 7 = 5,950
    Fal 18	900 @ 8 = 7,200		850 @ 7; 900 @ 8 = 13,150
    Fal 25		500 @ 7 = 3,500	350 @ 7; 900 @ 8 = 9,650
    Fal 30		20 @ 7 = 140 (shortage)	330 @ 7; 900 @ 8 = 9,510

    Closing balance = 1,230 units valued at Rs.9,510.

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19. 1920782 marksNumericalHideAnswer

    The following information are given: Annual requirement 10,000 units; Cost per unit Rs.4; Ordering cost per order Rs.80; Carrying cost per unit 10% of cost. Required: Economic Order Quantity.

    $$ \begin{aligned} \text{Carrying cost per unit} &= 10% \text{ of } \text{Rs.}4 \ &= \text{Rs.}0.40 \ EOQ &= \sqrt{\frac{2 \times A \times O}{C}} \ &= \sqrt{\frac{2 \times 10{,}000 \times 80}{0.40}} \ &= \sqrt{40{,}00{,}000} \ &= 2{,}000 \text{ units} \end{aligned} $$

    Economic Order Quantity = 2,000 units.

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20. 2020782 marksNumericalHideAnswer

    The time allowed to produce 10 units of output is one hour. A worker produced 500 units during the month. A fixed wage per hour is Rs.100. Required: Total wages of worker.

    $$ \begin{aligned} \text{Standard time for 500 units} &= 500 \text{ units} / 10 \text{ units per hour} \ &= 50 \text{ hours} \end{aligned} $$

    Total wages = Time (hours) $\times$ Rate per hour $$ \begin{aligned} &= 50 \times 100 \ &= \text{Rs.}5{,}000 \end{aligned} $$

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21. 21207810 marksNumericalHideAnswer

    The information regarding the cost records of the last month is as under: Direct material Rs.4,00,000; Direct wages Rs.3,00,000; Factory overheads Rs.1,50,000; Office overheads Rs.85,000. Following cost estimation were made for submitting the tender: Direct material Rs.1,00,000; Direct wages Rs.60,000; Profit 20% of sales. Factory overhead on the basis of direct wages and office overhead on the basis of factory cost. Required: (i) Cost sheet of last month (ii) Tender sheet.

    (i) Cost Sheet - Last Month

    Particulars	Rs.
    Direct material	4,00,000
    Direct wages	3,00,000
    Prime Cost	7,00,000
    Add: Factory overhead	1,50,000
    Factory Cost	8,50,000
    Add: Office overhead	85,000
    Total Cost	9,35,000

    Overhead rates:

    $$ \begin{aligned} \text{Factory OH} &= 1{,}50{,}000/3{,}00{,}000 \ &= 50% \text{ of direct wages} \ \text{Office OH} &= 85{,}000/8{,}50{,}000 \ &= 10% \text{ of factory cost} \end{aligned} $$

    (ii) Tender Sheet

    Particulars	Rs.
    Direct material	1,00,000
    Direct wages	60,000
    Prime Cost	1,60,000
    Add: Factory overhead (50% of 60,000)	30,000
    Factory Cost	1,90,000
    Add: Office overhead (10% of 1,90,000)	19,000
    Total Cost	2,09,000
    Add: Profit (20% of sales = 1/4 of cost)	52,250
    Selling Price (Tender)	2,61,250

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22. 2220785 marksNumericalHideAnswer

    On reconciliation of financial and cost accounting, following information were disclosed: (a) Factory overhead in cost account Rs.10,000 and recovered in financial account Rs.1,000 (b) Interest credited in financial account Rs.2,000 (c) Over valuation of closing stock in financial account Rs.3,000 (d) Net profit shown by cost account Rs.35,000 (e) Administrative expenses over absorbed in cost account by Rs.5,000. Required: Reconciliation between cost and financial account.

    Reconciliation Statement (starting from Cost Profit)

    Particulars	(+) Rs.	(-) Rs.
    Net Profit as per Cost Account	35,000
    Factory overhead over-charged in cost account (10,000 - 1,000)	9,000
    Interest credited in financial account only	2,000
    Closing stock over-valued in financial account	3,000
    Administrative expenses over-absorbed in cost account	5,000
    Total	54,000	-
    Net Profit as per Financial Account	54,000

    Profit as per Financial Account = Rs.54,000.

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