An electric device delivers a current of [tex]$15.0 A$[/tex] for 30 seconds. How many electrons flow through it?
Answer (1)
Calculate the apportionment ratios for delivery expenses and discounts received based on sales and purchases, respectively.
Apportion delivery expenses, salaries, insurance, rent, administrative, and advertisement expenses to each department and the general section based on the given ratios.
Calculate the gross profit for each department using sales, opening stock, closing stock, purchases, and discounts.
Determine the net profit for each department and the general section by subtracting the apportioned expenses from the gross profit, resulting in an overall net profit of − 9610 .
Explanation
Problem Analysis We are given the task to prepare a Departmental Trading, Profit and Loss Account. This involves allocating various expenses to different departments based on given ratios and information. We will start by calculating the apportioned expenses for each department and then prepare the accounts.
Apportioning Delivery Expenses First, we calculate the apportionment ratio for delivery expenses based on sales. Department A has sales of 25,000 and Department B has sales of 12,500. The total sales are 25 , 000 + 12 , 500 = 37 , 500 . The ratio for Department A is 37 , 500 25 , 000 = 0.6667 and for Department B is 37 , 500 12 , 500 = 0.3333 . Delivery expenses are 10,000. Therefore, the delivery expense for Department A is 10 , 000 × 0.6667 = 6666.67 and for Department B is 10 , 000 × 0.3333 = 3333.33 .
Apportioning Salaries, Insurance, and Rent Next, we apportion salaries, insurance, and rent based on the ratio 6:6:3. The total ratio is 6 + 6 + 3 = 15 . Salaries are 4,200, insurance is 1,800, and rent is 2,500. For Department A and B, the ratio is 15 6 and for the general section, it is 15 3 .
Salaries for Department A and B: 4 , 200 × 15 6 = 1680 Salaries for the general section: 4 , 200 × 15 3 = 840 Insurance for Department A and B: 1 , 800 × 15 6 = 720 Insurance for the general section: 1 , 800 × 15 3 = 360 Rent for Department A and B: 2 , 500 × 15 6 = 1000 Rent for the general section: 2 , 500 × 15 3 = 500
Apportioning Administrative and Advertisement Expenses We apportion administrative and general expenses and advertisement equally to each department and the general section. Administrative expenses are 4,000 and advertisement is 3,000. The total is 4 , 000 + 3 , 000 = 7 , 000 . Since there are three sections (A, B, and general), each section gets 3 7 , 000 = 2333.33 .
Apportioning Discounts Received Discounts received are apportioned according to purchases. Department A has purchases of 17,000 and Department B has purchases of 8,000. The total purchases are 17 , 000 + 8 , 000 = 25 , 000 . The ratio for Department A is 25 , 000 17 , 000 = 0.68 and for Department B is 25 , 000 8 , 000 = 0.32 . Discounts received are 4,500. Therefore, the discount for Department A is 4 , 500 × 0.68 = 3060 and for Department B is 4 , 500 × 0.32 = 1440 .
Calculating Gross Profit Now, we prepare the Departmental Trading Account for each department. Opening stock: Department A: 2,100, Department B: 450, Department C: 600 Closing stock: Department A: 500, Department B: 940, Department C: 680 Sales: Department A: 25,000, Department B: 12,500 Purchases: Department A: 17,000, Department B: 8,000
Gross profit for Department A: 25 , 000 + 500 − 2 , 100 − 17 , 000 + 3060 = 9460 Gross profit for Department B: 12 , 500 + 940 − 450 − 8 , 000 + 1440 = 6430 Gross profit for Department C: 680 − 600 = 80
Calculating Net Profit We prepare the Profit and Loss Account for each department by subtracting the apportioned expenses from the gross profit.
Net profit for Department A: 9460 − 6666.67 − 1680 − 720 − 1000 − 2333.33 = − 2940 Net profit for Department B: 6430 − 3333.33 − 1680 − 720 − 1000 − 2333.33 = − 2636.66 Net profit for the general section: − 840 − 360 − 500 − 2333.33 = − 4033.33
Calculating Overall Net Profit Finally, we combine the departmental net profits to get the overall net profit: − 2940 − 2636.66 − 4033.33 = − 9610 .
Final Answer The overall net profit is − 9610 .
Examples
Departmental accounting is crucial in retail businesses with multiple departments. For instance, a large store might have separate departments for clothing, electronics, and home goods. By preparing a Departmental Trading, Profit and Loss Account, the management can assess the profitability of each department. This helps in making informed decisions such as allocating resources to more profitable departments, identifying underperforming departments that need improvement, and evaluating the overall financial health of the business. This detailed analysis ensures that each department contributes optimally to the company's success.
