15 October 2008
In a Pharama Manufacturing unit, dye blocks are purchased for production. These are used for around 50-60 lakhs tablets. After that they obsolete having no value. My query is that how it is to be accounted for.It is to be treated as fixed asset and dep. to be charged or to be taken to stocks or anything else. Plz ans thanx
16 October 2008
Ours ia new unit. The production is very small means production of 50-60 laks tablets will happen in more than 1 year. Plz guide me how to pass journal entries in this regard.How they will appear in the balance sheet as well as in the profit & loss account and under which head.
16 October 2008
If the number of units the die can produce will take place in more than one year, the wtite off of the cost of die will also be in more than one year.
After arriving at the quantum of amortisation calculated as a proportion of cost in the ratio of actual production relation to the life in terms of quantity, the entry will be as under:
Amortisation of die To die
The amortisation will go to P&L as expenditure. The balance sheet will show the Written down cost of die after removing the amortisation amount from cost.
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