Question 1

From the following particulars, prepare a Departmental Trading and Profit and Loss Account
for the year ended 31st March, 2024.
Stock on 1st April 2023:
Department A 5,000
Department B 7,000
Purchases during the year:
Department A 60,000
Department B 50,000
Sales:
Department A 80,000
Department B 75,000

Wages and carriage 15,500

Rent, Rates and Insurance 31,000
Office Salary 7,750
Printing and Stationery 3,100

Closing Stock on 31st March 2024:

Department A 10,000
Department B 8,000
Apportion the expenses in proportion to the Turnover of each department.

Question 2
A Super Market carries on its business through Five Departments A, B, C, D and E.
(a) The following information for the year 2023-24 is now made available to you:
Salaries 18,000
Rent, Rates and Taxes 4,500
Insurance 2,700
Miscellaneous Expenses 5,400
All these expenses are chargeable to each department in proportion to the cost of goods sold
in the respective departments.
Prepare the profit and loss account to show the final result of each department and also the
combined results with respective percentages on sales.
The following balances as at 31st March 2024 were ascertained:

Opening Stock Purchases Sales Closing Stock

A 15,000 1,08,000 1,44,000 36,000

B 9,000 90,000 93,000 12,000

C 22,500 30,000 45,500 9,000

D 12,000 78,000 96,000 3,000

E 13,500 90,000 1,01,000 16,500

Question 3
The following purchases were made by a business house having three departments in 2023-24.
Department A - 1,000 units
Department B - 2,000 units at a total cost of ₹ 1,00,000
Department C - 2,400 units

Stock on 1st April 2023

Department A 120 units
Department B 80 units
Department C 152 units

Sales during the year 2023-24 were:

Department A 1,020 units at 20 each
Department B 1,920 units at ₹ 22.50 each
Department C 2,496 units at 25 each.
The rate of gross profits is the same in each case. Prepare the Department Trading Accounts.
Question 4
A firm has two departments X and Y. From the following figures, prepare the Departmental
Trading and Profit and Loss Accounts and Balance Sheet for the year ended 31st March 2024:
Debits Amount Credits Amount
Opening Stock: Transfer to X 5,000
X 15,000 Sales:
Y 20,000 X 1,00,000
Carriage: Inwards 3,000 Y 60,000
Outwards 5,000 Sundry creditors 15,000
Advertising 10,000 Capital 30,000
Salaries: Loan 30,000
X 6,000
Y 7,000
General salaries 12,000
Rent and rates 9,000
Lighting 900
Fixtures 15,000
Sundry debtors 20,000
Bad debts 1,600
Purchases:
X 60,000
Y 40,000
Bank Balance 6,500
Bank Interest 4,000
Transfer from Y 5,000
Total 2,40,000 Total 2,40,000
Area occupied by the two departments is in the ratio of 2:1. General salaries are to be divided
in the ratio of 5:3. The closing stocks were: X 14,000 and Y 15,000. Depreciation of fixtures
is 10% to be allocated in the ratio of space occupied. All other expenses are apportioned in the
sales ratio.

Question 5
From the following particulars, prepare a Departmental Trading and Profit and Loss Account
and a Balance Sheet as at 31st March 2024.
Particulars Amount
Capital Account 30,000
Sales:
Department A 70,000
Department B 30,000
Sundry Creditors 13,500
Stock on 1.4.2023:
Department A 3,400
Department B 1,100
General Reserve 750
Sundry Debtors 28,000
 Furniture and Fittings 1,080
Rent, Rates and Insurance 1,800
Cash in Hand 2,500
Cash at Bank 7,050
Marine Insurance 2,400
Purchases, Duty etc:
Department. A 43,000
Department B 25,000
Office Salaries 17,220
Printing and Stationery 2,700
Postage and Telegrams 600
Exchange and Discount (Dr.) 1,500
Investments 6,900
Closing Stock:
Department A 4,000
Department B 1,680

Apportion the expenses in proportion to the turnover of each department:

Provide Depreciation on Furniture 10%. Provision for Doubtful debts ₹ 300 and 2% on debtors
for discount. Increase General Reserve by ₹ 3,000. Allocate provision for bad debts also in the
ratio of 7:3.

Question 6
Following purchases were made by G Ltd having three departments.
Department A- 1,500 units
Department B- 2,500 units At a total cost Rs.1,18,000
Department C- 3,000 units

Stocks 1st April 2018 Sales during 2018-2019

Dept A- 150 units Dept A- 1,400 units @ Rs.18 each
Dept B- 200 units Dept B- 2,400 units @ Rs.24 each
Dept C- 250 units Dept C- 2,700 units @ Rs.30 each

The rate of gross profit is same in each case.

Other expenses were:
Salaries- 18,200; printing & stationery- 4,550: rent- 2,000: Interest paid- 2,730;
Depreciation- 3,640.
Allocate rent in the ratio of 2:2:1 and other expenses in the ratio of departmental gross
profits. Prepare departmental Trading & P/L A/C.
Question 7
Particulars Dept A Dept B Dept C
Purchases 2,00,000 3,00,000 8,00,000
Returns outwards 20,000 10,000 30,000
Sales 6,10,000 12,20,000 18,30,000
Returns inwards 10,000 20,000 30,000
Wages 40,000 60,000 80,000
Stock (1/04/2020) 50,000 70,000 10,000
Stock (1/04/2021) 80,000 50,000 40,000

Goods transferred from A Dept to B Dept- 10,000

To C Dept- 20,000
Goods transferred from B Dept to A Dept- 5,000
To C Dept- 10,000
Goods transferred from C Dept to A Dept- 7,000
To B Dept- 9,000

Following expenses are to be allocated equally:

Telephone charges is equal to 300, insurance charges ₹6000, office expenses ₹9000, rent
₹24,000 to be divided in the proportion of space that is A-1/4 B-1/ 4 and C 2/ 4.
Other expenses are as follows discount allowed ₹18,000, legal expenses ₹2000, bad debts
account ₹15,000, income tax ₹38,000, interest on capital ₹5000, Interest on debentures
₹16,000, directors fee ₹3000, general manager salary ₹10,000, audit fees ₹12,000, bank charges
₹9000.

Prepare departmental trading and P/L account.

Question 8
The following balances were extracted from the books of Kamat. Prepare Departmental
Trading and Profit and loss account for the year ended 31/3/2024 after adjusting the unrealised
departmental profits if any.
Dept. A Dept. B
Opening Stock 50,000 40,000
Purchases 6,50,000 9,10,000
Sales 10,00,000 15,00,000
General expenses incurred for both the departments were 1,25,000 and you are also supplied
with the following information.
 a) Closing stock of Dept A₹ 1,00,000 included goods from Dept B for 20,000 at cost to
Dept A.
b) Closing stock of Dept B 2,00,000 included goods from Dept A for 30,000 at cost to
Dept B.
c) Opening stock of Dept A and Dept B includes goods of the value of ₹ 10,000 and 15,000
taken from Dept B and Dept A, respectively at cost to transferee departments.
d) The gross profit is uniform from year to year.

Question 9
Following balances for the year ended 31st March 2019 were extracted from the books of
Shri Bikram Singh:
Stock (1/4/2018) Salaries 12,600
Radios 45,000 Publicity expenses 8,900
Watches 21,000 Rent, rates & Taxes 3,200
Sales: Commission 10,600
Radios 2,94,000 Miscellaneous expenses 5,000
Watches 1,46,000 Interest received 400
Purchases: Provision for bad & Doubtful Debts 800
Radios 2,25,000
Watches 1,15,000

Prepare departmental trading & P/L A/C for the year ended 31st March, 2019 after taking
into account the following:
(i) Stock as on 31st Mar, 2019 was:
Radios: Rs.30,000 ; Watch: Rs. 24,000
(ii) An amount of Rs. 1,200 out of Sundry Debtors of Rs.16,800 has to be written off as
bad and the provision for doubtful debts has to be increased thereafter to 10% of the
debts outstanding.
(iii) Following expenses are outstanding as on 31st Mar, 2019
Publicity: Rs.1,300 ; Salaries: Rs.1,200 ; Commission: Rs.1,700 ;
(iv) Provide 10% depreciation on furniture and fixtures of Rs. 12,400.
(v) Revenue items to be allocated in the ratio of 2:1 as between Radios and Watches.
Ignore fractions of a Rupee in calculation.

Question 10
A hyper market carries on its business through 3 departments: Grocery, Footwear and
clothing. The following information for the year 2020-2021 is made available to you. (All
figures given below under point- A and B are in Rs Lakhs)
a) Salary Rs.180, rent, rates and taxes Rs.60, insurance Rs.25, Miscellaneous
expenses Rs.50

b) The following balances were ascertained as on 31/03/2021:

 Particulars Grocery Footwear Clothing
Opening stock 15 9 22
Purchases 108 990 30
Sales 144 193 145
Closing stock 37 13 9

Expected outcomes:
I. Ascertain the cost of goods sold.
II. Ascertain the departmental profits or losses taking Cost of goods sold
as the basis for allocation of common expenses.

Question 11
The daily needs departmental stores request you to prepare its trading and P&L account for
the year ended March 31st 2021. The following information related to the year ended March
31st 2014 has been provided:

Particulars Department X Department Y

Opening stocks 45,00,000 30,00,000
Purchases 90,00,000 85,00,000
Purchases returns 10,000 15,000
Sales 1,20,00,000 1,10,00,000
Sales returns 60,000 40,000
Closing stock 55,50,000 40,25,000
Salaries paid- 3,50,000 4 3
Rent paid- 2,25,000 3 2
General expenses- 2,40,000 5 3
Commission paid- 12,000 2 1
Depreciation- 60,000 3 1
Advertising- 5,00,000 4 1

Question 12
Following is the P/L A/C of H Ltd for the year ended 31st March 2019:

Purchases: Sales:
Transistors(X) 1,60,000 X 1,75,000
Tape recorders(Y) 1,25,000 Y 1,40,000
Instruments for Service of 35,000
repairs(Z) 80,000 repairs(Z)
Wages 48,000 Stock on 31st March
Rent 10,800 2019
Sundry expenses 11,000 X 60,100
Profit 40,200 Y 20,300
Z 44,600
4,75,000 4,75,000
Other particulars are:
(i) Transistors and tape recorders have been sold in showroom and repairs etc made in the
factory.
(ii) Apportionment of wages is showroom ¾; Factory ¼; wages of showroom are to be
divided in 1:2 ratio in X and Y departments.
(iii)Rent of factory 500pm; rent of showroom is apportioned equally in X and Y
departments.
(iv) Sundry expenses are apportioned in the sales ratio of the departments.
Prepare departmental Trading &P/L A/c.

Question 13
A beauty salon has 3 departments. The particulars of which for the year ended 31/03/21 are
as under:

Particulars Cosmetic Lady’s hair dressing Gent’s hair dressing

Stock of goods 40,000 30,000 60,000
(1/4/2020)
Purchases 2,20,000 60,000 3,00,000
Stock of goods 60,000 50,000 80,000
(31/03/21)
Sales 3,60,000 1,80,000 5,40,000
Wages and salaries 56,000 1,00,000 1,20,000

The following expenses can’t be traced to any particular department.

Rent and rates- 70 ,000 Administration expenses- 96,000
Heating and lighting- 40,000 General expenses- 24,000
It is decided to apportion rent and rates together with heating and lighting in accordance
with the floor spaces occupied by each department which is in the proportion of 1/5, 1/2,
3/10 respectively.
Administration expenses and general expenses are to be allocated in the ratio of sales.
You are required to prepare Trading & P/L A/C for the period ending on 31/03/2021.

Question 14
M/S Shenoy Stores submitted the following particulars, regarding their departmental stores
for the year ending 31st March 2020.
Particulars Debit Credit
Capital on 1/4/2019 10,00,000
Drawings 2,00,000
Stock:
Dept -X 9,00,000
Dept-Y 4,20,000
Purchases:
 Dept-X 45,00,000
Dept-Y 23,00,000
Sales
Dept-X 58,80,000
Dept-Y 29,20,000
Cash in hand 1,04,000
Provision for bad debts 18,000
Interests on investments 12,000
Sundry creditors 1,76,000
6% Investments 2,00,000
Debtors 3,36,000
Furniture 2,46,000
Other expenses 1,02,000
Commission 2,06,000
Rent and taxes 60,000
Public expenses 1,80,000
Salaries 2,52,000

Prepare Trading P/L A/C & Balance sheet for the year ending as on 31/3/2020 by
considering the following:
a) Closing stock of Dept-X: 6,00,000, Dept-Y: 4,00,000
b) Outstanding expenses are: Salaries-24,000; Commission- 36,000 and rent-
30,000
c) Charge 10% depreciation on furniture
d) Revenue items are to be distributed in the ratio of 3:2 between Dept X and
Dept Y.
e) Bad debts to be written off Rs. 24,000 and provide for doubtful debts at 5%.

Question 15
From the following particulars prepare departmental Trading P&L A/C & balance sheet in
the books of Gayatri traders.

A B
Opening stock 17,400 14,700
Purchases 35,000 30,000
Sales 60,000 40,000
Wages 8,200 2,700

Rent and taxes 9,390 Sundry Exp 3,600 Salaries 3,000

Discount allowed 2,220 Discount received 650 Advertisement 3,680
Carriage inwards 2,340 Furniture & 3,000 Plant & Machinery 21,000
fixtures
Debtors 6,060 Creditors 30,650 Capital 47,660
Drawings 4,500 Cash 10,070 Lighting 2,100
Additional information:

(a) Internal transfer of goods from Dept. A to B at cost price of Rs.420

(b) Rent and taxes, sundry expenses, lighting, salary and carriage inwards to be distributed
in the ratio of 2/3 and 1/3 between A and B respectively.
(c) Advertising to be apportioned equally.
(d) Discount allowed and received to be apportioned as per sales and purchases(ignoring
transfers)
(e) Depreciation at 10% p.a. on furniture and plant & machinery to be charged in the ratio
of 3:1 between A & B departments
(f) Services rendered by B dept to A dept included in wages of B dept. Rs.500
(g) Stock on 31/12/20 were A -Rs. 16,740 B – Rs. 12, 050.

Departmental Accounting: Module 3