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i have a water bottling business. i supply 5 gallon water bottles to my customers. basically the bottles are my property. i am only selling the water. the cost of one bottle is around 17 Rs. and I am assuming that one bottle can be refilled only upto 30 times. so for costing purposes I have taken the bottle cost to be 17/30 = Rs. 0.57. actually i want to treat these bottles as a current asset and want to amortise its cost .
plz tell me the treatment to be done in P/L a/c & balance sheet. |
Jag Bhushan Sharma
(Faculty in a B-School)
(633 Points)
Replied 16 May 2011
When you buy the bottles you can pass the following entry Packing Material A/c Dr. Bank A/c Cr. At the end of the year, whatever amount becomes due for writting off, you can pass this entry Packaging A/c Dr. Packing Material A/c Cr. The packaging account will be shown in the P & L A/c while the balance left in the Packing Material A/c will be shown in Balance Sheet under the Current Assets.
vikas
(ca final)
(44 Points)
Replied 17 May 2011
thanks for the solution your experience really helping us.
faru faru
(b)
(108 Points)
Replied 17 May 2011
thanks a lot jag sir.
thanks jalpesh for bringing my problem to jag sir
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