Question

The Income Statement HP Ltd. for the year ended showed a profit of Rs.7,00,000/- The record of the company revealed the following:Closing stock as per Income Statement is undervalued by Rs.1,60,000, Factory Overheads over absorbed in Cost Record by Rs.50,000, Administration Overheads are under absorbed in Costing by Rs.1,00,000, Interest on Capital Rs.1,25,000 being debited only in Income Statement, Dividend Received Rs.5,000 is not considered in Cost Record. Prepare Reconciliation Statement and find out Profit/Loss as per Cost Record.

Answer 1

The Income Statement HP Ltd. for the year ended showed a profit of Rs.7,00,000/- The record of the company revealed the following:Closing stock as per Income Statement is undervalued by Rs.1,60,000, Factory Overheads over absorbed in Cost Record by Rs.50,000, Administration Overheads are under absorbed in Costing by Rs.1,00,000, Interest on Capital Rs.1,25,000 being debited only in Income Statement, Dividend Received Rs.5,000 is not considered in Cost Record. Prepare Reconciliation Statement and find out Profit/Loss as per Cost Record.