NT Ltd. showed a net loss of 9,000 as per their cost accounts for the year ended 31-03-2025. However, the financial books disclosed a net profit of…

(i) Statement of Reconciliation of profit as obtained under Cost and Financial Accounts (₹) (₹) Net Loss as per Cost Records (9,000) Add: Excess of Material Consumption (see below) 8,300 Factory Overhead over-absorbed (₹ 52,000 -45,000) 7,000 Selling & Distribution Overhead over-absorbed 6,000 Dividend Received 9,000 Depreciation over-charged (₹ 45,000 -42,000) 3,000 33,300 24,300 Less: Administrative Overhead under-absorbed 7,500 Interest on Loan 8,800 Over-valuation of Closing Stock of Finished Goods (₹ 41,000 -40,000) (80p.u. x 500 units = 40,000 in financial accounts) 1,000 (17,300) Profit as per Financial Records 7,000 (ii) Statement showing calculation of excess of material consumption in cost accounts: (₹) (₹) Net Loss as per Cost Records (9,000) Add: Excess of Material Consumption X Factory Overhead over-absorbed 7,000 Selling & Distribution Overhead over-absorbed 6,000 Dividend Received 9,000 Depreciation over-charged 3,000 X + 25,000 X + 16,000 Less: Administration Overhead under-absorbed 7,500 Interest on Loan 8,800 Over-valuation of Closing Stock of Finished Goods 1,000 (17,300) Profit as per Financial Records X - 1,300 Therefore, x - 1,300 = 7,000 Or X = 7,000 + 1,300 = 8,300 Excess of material consumption during the period in cost accounts is 8,300.