ZIMSEC O Level Principles of Accounting: Introduction to Departmental Accounts Example

Example Question

From the following list of balances you are required to prepare a departmental Income Statement in columnar form for the year ended 31 March 20X5, in respect of the business carried on under the name of OK Mart Hillside Branch:

Rent and business rates9 300
Delivery expenses3 600
Commission10 000
Insurance1 800
Purchases:Department A101 300
Department B81 200
Department C62 900
245 400
Discount Received2 454
Salaries and wages91 200
Advertising2 307
Sales:Department A180 000
Department B138 000
Department C

82 000

400 000
Depreciation4 200
Opening StockDepartment A27 100
Department B21 410
Department C

17 060

65 570
Administration and General Expenses19 800
Closing StockDepartment A23 590
Department B15 360
Department C

18 200

57 150

Except as follows, expenses are to be apportioned equally between the departments:

  • Delivery expenses – proportionate to sales.
  • Commission – 2\dfrac{1}{2} per cent of sales.
  • Salaries and wages; Insurance – in the proportion of 3:2:1.
  • Discounts received – 1 per cent of purchases.

The solution to this question can be found here

To access more topics go to the Principles of Accounts Notes.

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