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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 June 2014 rm purchase-rs 1000(20 kgs)
vat-rs 4
other expenses-rs 5

total-rs 1009

Q1) i
presume that the below mentioned journal entries for vat
purchases eligible for input credit are to be passed

(using figures mentioned above )

purchase dr 1005
vat recevbl dr 4
party cr 1009

vat adjustment entry is
vat payabl dr
vat recevbl cr

unadjusted vat recevbl amount will remain as dr balance in vat
recevbl a/c and will be shown in asset side OF BALANCE SHEET .Am i
correct?
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Q2)what about cst purchases?
(using figures mentioned above )

is the rm price 1009 in case cst is rs 4 and are following journal
entries right

purchase dr 1009
party cr 1009

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Q3)the accounting policy for 2012-13 is closing stock value of raw
material= cost price or market price whichever is is lower

31/03/13- 500 kgs for which costprice is 108 and market price is 100

therefore closing stock value is 500 x 100 = 50000 as on 31/03/13

closing stock of 2012-13 is opening stock of 2013-14

so which of the following is correct

working 1

o/s 500 kgs rs 50000
purch 100 kgs rs 10000 (assumption )
consump 500 kgs rs 54000 (108 rs (cp as given above) x 500 kgs)
clsng stoc 100 kgs rs 6000

or

working 2

o/s 500 kgs rs 50000
purch 100 kgs rs 10000
consump 500 kgs rs 54000 (100 rs (mp as given above) x 500 kgs)
clsng stoc 100 kgs rs 10000

ASSUMING ONLY THE OPENING STOCK IS CONSUMED IN THAT MONTH AND NOT THE GOODS PURCHASED DURING THAT MONTH.Which rate is to be applied to determine the value of consumption -opening stock rate or actual cost price?

Amol S Joglekar

Amol S Joglekar (Expert)
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19 June 2014 ask one at a time so that it will be easy for the experts to deal one by one......
why do you think that the debit balance in the VAT receivable account is Current Asset?