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Zorluk: OrtaPreparation of Departmental Trading, Profit and Loss Accounts

Bello & Sons Enterprises operates two departments: Hardware and Stationery. For the accounting year ended 31 December 2025, the following information relates to the Hardware Department:

- Sales: ₦180,000₦180,000
- Opening Stock: ₦30,000₦30,000
- Purchases: ₦110,000₦110,000
- Closing Stock: ₦20,000₦20,000

The total administrative expenses for both departments combined amounted to ₦40,000₦40,000, which are apportioned between Hardware and Stationery in proportion to their sales turnover. The total sales turnover for the business was ₦300,000₦300,000.

What is the net profit of the Hardware Department?

  1. A
    ₦60,000
  2. B
    ₦40,000
  3. ₦36,000Cevap
  4. D
    ₦16,000

Cevap

The net profit of the Hardware Department is ₦36,000.
The gross profit of Hardware Department is calculated as Sales (₦180,000₦180,000) minus Cost of Goods Sold (₦30,000+₦110,000−₦20,000=₦120,000₦30,000 + ₦110,000 - ₦20,000 = ₦120,000), yielding ₦60,000₦60,000. Apportioning the administrative expenses of ₦40,000₦40,000 based on Hardware's share of turnover (₦180,000/₦300,000=60%₦180,000 / ₦300,000 = 60\%) gives ₦24,000₦24,000. Deducting ₦24,000₦24,000 from ₦60,000₦60,000 gross profit gives the net profit of ₦36,000₦36,000.

Adım Adım Çözüm

1
Calculate Cost of Goods Sold (COGS) for Hardware Department
COGS = Opening Stock + Purchases - Closing Stock = ₦30,000+₦110,000−₦20,000=₦120,000₦30,000 + ₦110,000 - ₦20,000 = ₦120,000
Cost of goods sold measures the direct cost of merchandise sold during the period.
2
Calculate Gross Profit for Hardware Department
Gross Profit = Sales - COGS = ₦180,000−₦120,000=₦60,000₦180,000 - ₦120,000 = ₦60,000
Gross profit represents revenue remaining after subtracting direct cost of sales.
3
Determine Hardware Department's share of administrative expenses
Turnover Ratio = ₦180,000₦300,000=0.60\frac{₦180,000}{₦300,000} = 0.60 (or 60%60\%). Apportioned Expense = 0.60×₦40,000=₦24,0000.60 \times ₦40,000 = ₦24,000
Shared overheads must be allocated using the specified turnover ratio basis.
4
Calculate Net Profit for Hardware Department
Net Profit = Gross Profit - Apportioned Expenses = ₦60,000−₦24,000=₦36,000₦60,000 - ₦24,000 = ₦36,000
Net profit is the final departmental operating profit after overhead allocation.

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Preparation of Departmental Trading, Profit and Loss Accounts and Expense Apportionment
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Preparation of Departmental Trading, Profit and Loss Accounts

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