FYBBA – Semester I – Financial Accounting – Module 7 – Departmental Accounts

“If you really look closely, most overnight successes took a long time.”
Illustration 1: Independent Departments
M/S omega is a departmental store having three departments X, Y and Z. The information regarding three
department for the year ended 31.3.2023 are as follow:
Particulars X Y Z
Opening stock 36,000 24,000 20,000
Purchases 1,32,000 88,000 44,000
Debtors at the 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 employee 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:
Particular Amt.
Carriage inward 3,000
Carriage outward 2,700
Salaries 48,000
Advertisement 2,700
Discount Allowed 2,250
Discount Received 1,800
Rent, rate and taxes 7,500
Depreciation on furniture 1,000
Electricity Expense 3,000
Labour welfare expense 2,400
You are required to prepare departmental trading and Profit and loss account for the year ended 31st March 2023 after
providing provision for Bad Debts at 5% p.a.
Also evaluate the performance of both the department based on its gross profit.
Illustration # 2
From the following information prepare Departmental Trading and Profit & Loss Account of M/s Saloni Enterprise
for the year ended March 31, 2023.
Particulars Total Department X Department Y Department Z
(Rs.) (Rs.) (Rs.) (Rs.)
Opening stock 70,000 65,000 95,000
Purchases 5,00,000 3,00,000 2,00,000
Furniture 7,50,000 15,00,000 15,00,000
Staff welfare expenses 52,000
Sales 27,00,000
Rent 70,000
Advertising 50,000
Depreciation on furniture 30,000
Lighting charges 70,000

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FYBBA – Semester I – Financial Accounting – Module 7 – Departmental Accounts
Sales Return 50,000 75,000 75,000
Salesmen commission 60,000
Closing stock 50,000 60,000 90,000
Carriage inwards 9,000
Sundry expenses 4,050
Discount received 5,000
Bad debt 6,000
No of employees 40 60 30
Space occupied (in sq.ft.) 500 600 300
Additional information:
i) In the above furniture balances, furniture of Department Z was purchased on September 30, 2022.
ii) Sale value of Department X is twice of sale value of Department Y while sale value of Department Y is equal to
Department Z.
iii) Sundry expenses are to be apportioned to the departments in the ratio of purchases.
Illustration # 3
The trading and Profit and Loss A/c of Hindustan Electronics for the year ending 31st March 2023 is as under:
Particulars Amount Particulars Amount
Purchases: Sales :
Transistors (X) 1,60,000 Transistors (X) 1,75,000
Tape recorders (Y) 1,25,000 Tape recorders (Y) 1,40,000
Spare parts of servicing and repairs job (Z) 80,000 Spare parts of servicing and repairs job (Z) 35,000
Salaries and wages 48,000 Closing Stock:
Rent 10,800 Transistors (X) 60,100
Sundry Expense 11,000 Tape recorders (Y) 20,300
Profit 40,200 Spare parts of servicing and repairs job (Z) 44,600
4,75,000 4,75,000
Prepare Departmental Accounts for each of the three department’s X, Y, Z on the basis of following information:
1) Transistors and tape recorders are sold at the showroom.
2) Servicing and repairs are carried out at workshop
3) Salaries and wages comprise of the following:
Showroom ¾ and workshop ¼ It was decided to allocate the showroom salaries and wages in the ratio 1:2
between Department X and Y.
4) The workshop rent is 500 p.m. The rent of the showroom is to be divided equally between X and Y.
5) Sundry expense are to be allocated on the basis of the sales of each Department.
Illustration # 4
M/s TBZ is a leading dealer in precious, semiprecious stones and artificial jewellery. They are into wholesale
business of semiprecious stones and precious stones which is conducted through godown and their retail
showroom conducts business of artificial jewellery. The following are the balances extracted from the books of M/s
TBZ as at the end of 31.3.2023. Prepare Departmental Trading and Profit and loss A/c for the year ended 31.3.2023.
Particulars Amount (Rs.)
Opening Stock :
Artificial Jewellery 5,00,000
Semiprecious stones 1,25,000
Precious stones 2,50,000

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FYBBA – Semester I – Financial Accounting – Module 7 – Departmental Accounts
Purchases:
Artificial Jewellery 24,00,000
Semiprecious stones 8,00,000
Precious stones 12,00,000
Sales:
Artificial Jewellery 50,00,000
Semiprecious stones 18,00,000
Precious stones 21,00,000
Godown maintenance 90,000
Salary of retail outlet 1,80,000
Salary of godown staff (on the basis of sales) 6,50,000
Sundry expenses 33,000
Rent 2,70,000
Godown Lighting 3,60,000
Showroom Lighting 2,40,000
Advertisement 8,90,000
Bad debt :
Artificial Jewellery 50,000
Semiprecious stones 50,000
Precious stones 25,000
Debtors 31/3/2023 (before providing for above bad debt)
Artificial Jewellery 12,50,000
Semiprecious stones 4,50,000
Precious stones 5,25,000
Closing Stock :
Precious stones 5,00,000
Semiprecious stones 2,50,000
Artificial Jewellery 10,00,000
Additional Information:
1. Sundry expenses are to be allocated in the ratio of purchases.
2. Total area occupied by the business is 2,250 sq. ft. Retail business occupies 1/3rd of the total space available
and balance is occupied by the wholesale business. Of the total space occupied by wholesale department
1/3rd is utilized by semiprecious stones department and the remaining space is occupied by precious stones
department.
3. Provide for RDD @ 5% on debtors
Note: (sales ratio will exclude the interdepartmental transfer.)
Illustration # 5: Interdepartmental Transfer at Cost (dependent Departments)
Reliance Ltd. had three departments. The following information is available from the departments.
Particular Shoe Sandal Leather
Opening stock 33,000 27,000 1,05,000
Purchases 90,000 60,000 2,25,000
Sales 1,80,000 1,20,000 2,70,000
Wages 15,000 9,000
Closing stock 21,000 72,000 81,000

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FYBBA – Semester I – Financial Accounting – Module 7 – Departmental Accounts
a) Expense Paid: Salary Rs. 60,000; Rent Rs. 10,800; Printing Rs. 4,800; Electricity Rs. 2,160; and Sundry expense
Rs. 2,850.
b) Transfer from leather department to shoe department is 6,000 and to sandal department is 63,000. (both
transfer are at cost)
Other information:
1. Salaries of Rs. 48,000 were paid to 20 salesman on a uniform scale in three departments. The number of
salesman was 4, 5 & 11 respectively. Allocate the remaining salary in equal proportion to all the
department.
2. Space occupied by the departments were equal.
3. Printing expenses to be appointed as 1:1:2.
4. The electricity points in each department were 5, 4, and 9 respectively.
5. Sundry expenses to be allocated in the ratio of sales ( Excluding inter departmental transfer)
You are required to prepare departmental trading and Profit and loss account for the year ended 31st March 2023.

“The nice thing about teamwork is that you always have others on your side.”

Illustration # 6 (HW)
From the following Trial Balance, prepare Departmental Trading and P&L Account for the year ending 31st March
2004 and the Balance Sheet as at that date:
Rs (in'000)
Stock, 1st April 2003 A Department 1,700
B Department 1,450
Purchases A Department 3,540
B Department 3,020
Sales A Department 6,080
B Department 5,125
Wages A Department 820
B Department 270
Rent, Rates, Taxes and Insurance 939
Sundry Expenses 360
Salaries 300
Lighting & Heating 210
Discount allowed 222
Discount received 65
Advertising 368
Carriage Inward 234
Furniture & Fittings 300
Machinery 2,100
Sundry Debtors 606
Sundry Creditors 1,860
Capital Account 4,766
Drawings 450
Cash at Bank 1,007
The further following information is available:
1) Internal transfer of goods from Dept A to Dept B Rs. 42,000 and from Dept B to Dept A Rs 50,000 not included
in above purchase and sales figure.
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FYBBA – Semester I – Financial Accounting – Module 7 – Departmental Accounts
2) The Items Rent, Rates, Taxes and Insurance, Sundry Expenses, Lighting and Heating, Salaries and Carriage are
to be apportioned 2/3rd to A department and 1/3rd to B Department.
3) Advertising is to be apportioned equally.
4) Discounts allowed and received are to be apportioned on the basis of Departmental Sales and Purchases
(excluding Transfers)
5) Depreciation at 10% p.a. on Furniture and Fittings and on Machinery is to be charged 3/4th to A
Department and 1/4th to B Department.
6) Stock on 31st March, 2004 in A Department was worth Rs.16,74,000 and in B Department Rs. 12,05,000.
Illustration # 7 (HW) (AFTER 8)
Cloth Ready-made
Particulars Deptt. Clothes Deptt.
(Rs.) (Rs.)
Opening Stock 240,000 48,000
Purchases 1,800,000 24,000
Sales 2,000,000 600,000
Transfer to Ready -made clothes deptt. 400,000
Expenses on Manufacturing 68,000
Expenses on Selling 40,000 4,000
Closing Stock 3,00,000 60,000
The stock in the ready-made clothes department may be considered as consisting of 80% cloth and the rest as expenses.
The cloth department made a gross profit of 25% in 2002.General expenses of Rs. 180,000 to be apportioned in the
sales ratio.
Illustration # 8

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FYBBA – Semester I – Financial Accounting – Module 7 – Departmental Accounts
Illustration # 9
Tailors Ltd have two departments Cloth and Outfitting. Outfitting Dept gets all its requirements of cloth
from the cloth department at the usual selling price. On 31st March’15, the following was the Trial Balance.
Particulars Dr. Rs. Cr. Rs.
Share Capital 200,000
Stock: Cloth 80,000
Stock: Outfitting Dept 5,000
Purchases: Cloth 1,100,000
Purchases: Outfitting Dept 10,000
Sales: Cloth 1,250,000
Sales: Outfitting Dept 150,000
Transfer of Cloth to Outfitting Dept (selling Price) 50,000 50,000
Director Fees & Remuneration 30,000
Wages & Salaries: Cloth 20,000
Wages & Salaries: Outfitting 40,000
Rent & Rates (3/4 th to Cloth) 8,000
Electricity (3/4th to Cloth) 2,000
Depreciation: Outfitting 5,000
Cloth 1,000
Office Salaries 16,000
Furniture & Fittings 20,000
office Expenses 3,000
Equipment 50,000
Carriage Inwards (on cloth) 66,000
Investments 1,00,000
Income from Investments 9,500
Stock Reserve 500
Cash at bank 54,000
16,60,000 16,60,000
Closing stock of cloth on hand in the cloth dept.was Rs. 96,000 and that in the Outfitting amounted to Rs. 7,500
(at cost to their respective departments). Prepare Departmental Trading and P&L, General P&L fot the year ended
31st March 2015.
Illustration # 10 (HW)
Dumb, Dumber & co. has two departments i.e. Piece goods and tailoring. All goods purchased by tailoring
department from piece goods department are sold by piece goods department at normal maket prices same as
prices charged to outside customers. From the following information prepare departmental Trading and Profit &
Loss account for the year ended 31st March 2023.
Piece Goods Tailoring
Opening stock 20,000 ---
Purchases 2,20,000 10,000
Goods from Piece goods dept. --- 60,000
Wages 600 6,400
Salaries 4,800 1,200
Closing ( at cost) 38,600 14,000
Sales 2,43,000 1,36,000
Printing & Stationery 1,000 600
Machinery ---- 12,000

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FYBBA – Semester I – Financial Accounting – Module 7 – Departmental Accounts
Following further information is available:
Particulars Amt. Particulars Amt.
Advertisement 10,000 Creditiors 7,000
Salaries 18,000 Drawings 1,00,000
Capital 1,20,000 Cash at Bank 41,000
Debtors 54,000 Cash in hand 6,400
• Depreciate machinery by 10% p.a.
• The general exenses are to be apportioned in the ratio of 3:2 for the piece goods and tailoring department
respectively.
Illustration # 11
From the following balance extracted from the books of Mr. R.N.Ghosh, prepare Departmental Trading Account and
General Profit and Loss Account for the year ended 31st March,2023 as at that date after adjusting the unrealized
departmental profits, if any.
Particulars Debit Rs. Credit Rs.
Capital 3,00,000
Land & Building 1,25,000
Furniture 25,000
Opening Stock Dept A 30,000
Dept B 40,000
Purchases Dept A 10,00,000
Dept B 15,00,000
Sales Dept A 20,00,000
Dept B 32,00,000
General Expenses 14,00,000
Sundry Debtors 2,00,000
Sundry Creditors 1,00,000
Drawings 2,80,000
Cash & Bank 10,00,000
Additional Information:
1) Closing Stock: Dept. A Rs. 1,30,000 including goods from Dept B Rs. 40,000.
Closing Stock: Dept B Rs. 2,60,000 including goods from Dept A Rs. 90,000.
2) Sales of Dept. A include transfer of goods to Dept. B of value Rs. 2,00,000 and sales of Dept. B include transfer of
goods to Dept. A of value Rs. 3,00,000 both at market price.
3) Opening Stock of Dept. A & Dept. B include goods of value Rs. 10,000 and Rs. 15,000 taken from Dept. B and Dept.
A respectively at cost to transferor Department.
4) Depreciate Land & Building by 5% and furniture by 10% p.a.

“Great things in business are never done by one person.”

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