The following figures have been taken from the financial accounts of a manufacturing firm for the year ended 31st March, 2025: (₹) Direct material…

Statement of Cost and Profit (As per Cost Records) Particulars (₹) Direct Material 22,40,000 Direct Wages 12,00,000 Prime Cost 34,40,000 Factory Overhead (20% of 34,40,000) 6,88,000 41,28,000 Less: Closing Stock (WIP) (96,000) Works Cost or Cost of production (52,000 units) 40,32,000 Less: Finished Goods (4,000 units @77.5385) (3,10,154) Cost of Goods Sold (48,000 units) 37,21,846 Administrative Overhead (48,000 units @4.8 p.u.) 2,30,400 Selling and Distribution Overhead (48,000 @6.40 p.u.) 3,07,200 Cost of Sales 42,59,446 Net profit (Balancing figure) 5,40,554 Sales Revenue 48,00,000 Profit and Loss Account (As per financial records) Particulars Amount (₹) Particulars Amount (₹) To Direct Material consumed 20,00,000 By Sales 48,00,000 To Direct Wages 12,00,000 By Closing Work-in-process 96,000 To Factory overheads 6,40,000 By Closing Finished stock 3,20,000 To Depreciation on Plant and Machinery 1,20,000 To Repairs & Maintenance (Factory) 48,000 To Gross Profit c/d 12,08,000 52,16,000 52,16,000 To Administrative overheads 2,80,000 By Gross Profit b/d 12,08,000 To Selling & distribution overheads 3,84,000 By Dividend received 40,000 To Bad debts 32,000 By Interest on deposit 8,000 To Preliminary expenses 16,000 To Interest on Loan 60,000 To Legal charges 4,000 To Net profit (balancing figure) 4,80,000 12,56,000 12,56,000 Reconciliation Statement Particulars Amount (₹) Amount (₹) Net profit as per Financial Profit & Loss A/c 4,80,000 Add: Administrative overheads (2,80,000 - 2,30,400) 49,600 Selling & Distribution overheads (3,84,000 - 3,07,200) 76,800 Bad debts 32,000 Preliminary expenses 16,000 Interest on loan 60,000 Legal charges 4,000 Factory overheads (6,40,000 + 1,20,000 + 48,000 - 6,88,000) 1,20,000 3,58,400 8,38,400 Less: Difference in value of materials consumed (22,40,000 - 20,00,000) 2,40,000 Dividend received 40,000 2,80,000 Profit as per Costing Profit & Loss A/c 5,58,400 Note: Since advertisement expense is capital in nature, it is not considered in profit and loss account.