Lesson Notes By Weeks and Term - Senior Secondary 3
Departmental account II
Departmental account II
Term: 1st Term
Week: 10
Class: Senior Secondary School 3
Age: 17 years
Duration: 40 minutes of 2 periods each
Date:
Subject: Financial accounting
Topic:- Departmental account II
SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to
INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source
INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures
INSTRUCTIONAL PROCEDURES
PERIOD 1-2
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PRESENTATION |
TEACHER’S ACTIVITY |
STUDENT’S ACTIVITY |
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STEP 1 INTRODUCTION |
The teacher reviews the previous lesson on departmental account |
Students pay attention |
|
STEP 2 EXPLANATION |
She describes the format of the departmental account |
Students pay attention and participates |
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STEP 3 DEMONSTRATION |
She solves exercises on departmental account |
Students pay attention and participate
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STEP 4 NOTE TAKING |
The teacher writes a summarized note on the board |
The students copy the note in their books |
NOTE
DEPARTMENTAL ACCOUNT
EXAMPLES
Goods are transferred from Department P to Department Q at a price 50% above cost. If closing stock of Department Q is ` 27,000, compute the amount of stock reserve.
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` |
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Closing Stock of Department Q Goods send by Department P to Department Q at a price 50% above cost Hence profit of Department P included in the stock will be - 27,000´50 = 150 Amount of the Stock Reserve will be ` 9,000. |
27,000
9,000 |
Dept P transfers goods to Dept Q at a profit of 50% of cost. Hence, if cost is ` 100/- the profit = ` 50 and Transfer Price = ` 150. Therefore, the profit of Dept P included in the stock value of Dept Q is one – third of the sale value
EXAMPLE 2
Z Ltd. has three departments and submits the following information for the year ending on 31st March, 20X1:
|
|
A |
B |
C |
Total (`) |
|
Purchases (units) |
6,000 |
12,000 |
14,400 |
|
|
Purchases (Amount) |
|
|
|
6,00,000 |
|
Sales (Units) |
6,120 |
11,520 |
14,976 |
|
|
Selling Price (per unit) ` |
40 |
45 |
50 |
|
|
Closing Stock (Units) |
600 |
960 |
36 |
|
You are required to prepare departmental trading account of Z Ltd., assuming that the rate of profit on sales is uniform in each case.
Solution
Departmental Trading Account for the year ended on 31st March, 20X1
|
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
||
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|
|
` |
` |
` |
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|
` |
` |
` |
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To |
Opening Stock (W.N.4) |
11,520 |
8,640 |
12,240 |
By |
Sales A- 6120 x 40 B- 11,520 x 45 C- 14,976 x 50 Closing Stock (W.N.4) |
2,44,800 |
5,18,400 |
7,48,800 |
|
To |
Purchases (W.N.2) |
96,000 |
2,16,000 |
2,88,000 |
By |
9,600 |
17,280 |
720 |
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|
To |
Gross Profit (b.f.) |
1,46,880 |
3,11,040 |
4,49,280 |
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|
|
|
|
|
|
2,54,400 |
5,35,680 |
7,49,520 |
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|
2,54,400 |
5,35,680 |
7,49,520 |
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|
|
Selling price of unit purchased: |
` |
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|
Department A 6,000 x 40 |
2,40,000 |
|
Department B 12,000 x 45 |
5,40,000 |
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Department C 14,400 x 50 |
7,20,000 |
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Total Selling Price |
15,00,000 |
|
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Less: Purchase (Cost) Value |
(6,00,000) |
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|
Gross Profit |
9,00,000 |
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Profit Margin Ratio = 9,00,000 ´100 = 60% 15,00,000 |
Statement showing department-wise per unit Cost and Purchase Cost
|
|
A |
B |
C |
|
|
` |
` |
` |
|
Selling Price (Per unit) (`) |
40 |
45 |
50 |
|
Less:Profit Margin @ 60% (`) Profit Margin is uniform for all depts at 60% |
(24) |
(27) |
(30) |
|
Purchase price per unit (`) |
16 |
18 |
20 |
|
Number of units purchased |
6,000 |
12,000 |
14,400 |
|
(Purchase cost per unit x Units purchased) |
96,000 |
2,16,000 |
2,88,000 |
|
|
A |
B |
C |
|
Sales (Units) |
6,120 |
11,520 |
14,976 |
|
Add:Closing Stock (Units) |
600 |
960 |
36 |
|
|
6,720 |
12,480 |
15,012 |
|
Less:Purchases (units) |
(6,000) |
(12,000) |
(14,400) |
|
Opening Stock (Units) |
720 |
480 |
612 |
Statement showing department-wise cost of Opening Stock and Closing Stock
|
|
A |
B |
C |
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Cost of Opening Stock (`) |
720 x 16 |
480 x 18 |
612 x 20 |
|
` |
11,520 |
8,640 |
12,240 |
|
Cost of Closing Stock |
600 x 16 |
960 x 18 |
36 x 20 |
|
` |
9,600 |
17,280 |
720 |
EVALUATION:
information for the year ending on 31st March, 20X1:
|
Particulars |
A |
B |
C |
Total (`) |
|
Purchases (units) |
5,000 |
10,000 |
15,000 |
8,40,000 |
|
Purchases (Amount) |
|
|
|
|
|
Sales (units) |
5,200 |
9,800 |
15,300 |
|
|
Selling price (` per unit) |
40 |
45 |
50 |
|
|
Closing Stock (Units) |
400 |
600 |
700 |
You are required to prepare departmental trading account of Brahma Limited assuming that the rate of profit on sales is uniform in each case.
March, 20X1 are given below:
|
|
X |
Y |
Z |
|
|
` |
` |
` |
|
Opening Stock |
36,000 |
24,000 |
20,000 |
|
Purchases |
1,32,000 |
88,000 |
44,000 |
|
Debtors at end |
15,000 |
10,000 |
10,000 |
|
Sales |
1,80,000 |
1,35,000 |
90,000 |
|
Closing stock |
45,000 |
17,500 |
21,000 |
|
Value of furniture in each department |
20,000 |
20,000 |
10,000 |
|
Floor space occupied by each department (in sq. ft.) |
3,000 |
2,500 |
2,000 |
|
Number of employees in each Department |
25 |
20 |
15 |
|
Electricity consumed by each department (in units) |
300 |
200 |
100 |
The balances of other revenue items in the books for the year are given below:
|
|
Amount (`) |
|
Carriage inwards |
3,000 |
|
Carriage outwards |
2,700 |
|
Salaries |
48,000 |
|
Advertisement |
2,700 |
|
Discount allowed |
2,250 |
|
Discount received |
1,800 |
|
Rent, Rates and Taxes |
7,500 |
|
Depreciation on furniture |
1,000 |
|
Electricity expenses |
3,000 |
|
Labour welfare expenses |
2,400 |
You are required to prepare Departmental Trading and Profit and Loss Account for the year ended 31st March, 20X1 after providing provision for Bad Debts at 5%.
CLASSWORK: As in evaluation
CONCLUSION: The teacher commends the students positively