A manufacturing company disclosed a net loss of 3,47,000 as per their cost accounts for the year ended March 31,2024. The financial accounts however…

CA Intermediate · Cost and Management Accounting · RTP · September 2024
A manufacturing company disclosed a net loss of 3,47,000 as per their cost accounts for the year ended March 31,2024. The financial accounts however disclosed a net loss of 5,10,000 for the same period. The following information was revealed as a result of scrutiny of the figures of both the sets of accounts. (₹) (i) Factory Overheads under-absorbed 40,000 (ii) Administration Overheads over-absorbed 60,000 (iii) Depreciation charged in Financial Accounts 3,25,000 (iv) Depreciation charged in Cost Accounts 2,75,000 (v) Interest on investments not included in Cost Accounts 96,000 (vi) Income-tax provided 54,000 (vii) Interest on loan funds in Financial Accounts 2,45,000 (viii) Transfer fees (credit in financial books) 24,000 (ix) Stores adjustment (credit in financial books) 14,000 (x) Dividend received 32,000 PREPARE a memorandum Reconciliation Account

Suggested Answer and Working Notes:

12. Memorandum Reconciliation Accounts Dr. (₹) Cr. (₹) To Net Loss as per Costing books 3,47,000 By Administration overheads over recovered in cost accounts 60,000 To Factory overheads under absorbed in Cost Accounts 40,000 By Interest on investment not included in Cost Accounts 96,000 To Depreciation under charged in Cost Accounts 50,000 By Transfer fees in financial books 24,000 To Income-Tax not provided in Cost Accounts 54,000 By Stores adjustment (Credit in financial books) 14,000 To Interest on Loan Funds in Financial Accounts 2,45,000 By Dividend received in financial books 32,000 By Net loss as per financial books 5,10,000 7,36,000 7,36,000

Topics: Cost Accounting Systems

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