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Zorluk: ZorPreparation of Departmental Trading, Profit and Loss Accounts

Apex Commercial Enterprises operates two distinct departments: Department A and Department B. For the financial year ended 31 December 2025, the following trial balance extracts were made available:

Transaction DetailsDepartment A (₦₦)Department B (₦₦)Total (₦₦)
Sales600,000400,0001,000,000
Purchases360,000240,000600,000
Opening Inventory50,00040,00090,000
Closing Inventory70,00050,000120,000
Floor Area Occupied1,000 sq. m3,000 sq. m4,000 sq. m

Additional common expenses incurred during the year were:
- Carriage Inwards: ₦50,000₦50,000 (to be apportioned on the basis of purchases)
- Rent and Rates: ₦80,000₦80,000 (to be apportioned on the basis of floor area occupied)
- Salaries and Wages: ₦100,000₦100,000 (to be apportioned on the basis of turnover)

Based on the information provided, what is the net profit of Department A?

  1. ₦150,000Cevap
  2. B
    ₦122,000
  3. C
    ₦180,000
  4. D
    ₦110,000

Cevap

The net profit of Department A is ₦150,000.
Department A achieves a gross profit of ₦230,000₦230,000 (₦600,000₦600,000 sales - ₦370,000₦370,000 cost of goods sold). Deducting its total apportioned expenses of ₦80,000₦80,000 (₦20,000₦20,000 rent based on 1:3 floor area ratio + ₦60,000₦60,000 salaries based on 3:2 turnover ratio) gives a net profit of ₦150,000₦150,000.

Adım Adım Çözüm

1
Apportion Carriage Inwards to Department A
Carriage Inwards for Department A = 360,000600,000×₦50,000=35×₦50,000=₦30,000\frac{360,000}{600,000} \times ₦50,000 = \frac{3}{5} \times ₦50,000 = ₦30,000
Carriage inwards is directly linked to goods purchased, so it is apportioned using the purchases ratio.
2
Calculate Cost of Goods Sold (COGS) and Gross Profit for Department A
COGS = Opening Inventory (₦50,000₦50,000) + Purchases (₦360,000₦360,000) + Carriage Inwards (₦30,000₦30,000) - Closing Inventory (₦70,000₦70,000) = ₦370,000₦370,000.
Gross Profit = Sales (₦600,000₦600,000) - COGS (₦370,000₦370,000) = ₦230,000₦230,000.
Gross profit is determined by subtracting cost of goods sold (including direct buying expenses) from departmental sales.
3
Apportion Rent & Rates and Salaries & Wages to Department A
Rent & Rates = 1,0004,000×₦80,000=14×₦80,000=₦20,000\frac{1,000}{4,000} \times ₦80,000 = \frac{1}{4} \times ₦80,000 = ₦20,000.
Salaries & Wages = 600,0001,000,000×₦100,000=35×₦100,000=₦60,000\frac{600,000}{1,000,000} \times ₦100,000 = \frac{3}{5} \times ₦100,000 = ₦60,000.
Total Operating Expenses for Dept A = ₦20,000+₦60,000=₦80,000₦20,000 + ₦60,000 = ₦80,000.
Rent is apportioned based on floor area occupied, while salaries are apportioned based on turnover.
4
Calculate Net Profit for Department A
Net Profit = Gross Profit (₦230,000₦230,000) - Total Expenses (₦80,000₦80,000) = ₦150,000₦150,000.
Departmental net profit is derived by deducting apportioned indirect expenses from departmental gross profit.

Anahtar Kavram

Departmental Trading, Profit and Loss Account preparation involves allocating direct expenses to COGS and apportioning indirect overheads according to appropriate cost drivers (floor area for rent, turnover for salaries, purchases for carriage inwards).
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Preparation of Departmental Trading, Profit and Loss Accounts

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