CA.Madhavan (Chartered Accountant) (942 Points)
04 September 2008From the point of view of distributor:
Distributor gets goods free as sales commission along with normal purchase.
ie suppose a 12 pakets of vanaspathi purchased ,5 packets free to agent......how to account for better control
These free items are shown in purchase invoice at nil value.
CA Naveen Kumar Agrawal
(Chartered Accountant / MBA)
(939 Points)
Replied 05 September 2008
salman is right. let me explain wid an example:
if u purchased 12 pac. + 5 free Pac. for Rs. 204 (ie 12Pac x Rs. 17/-per Pac + 5 Pac x Rs. 0/- per Pac)
now the Avg cost per Pac is Rs. 12/- and not Rs. 17/-
Avg Cost Per Pac = Total Expenditure / No. of Pac received
how comes: Rs. 204 / 17 Pac. = Rs. 12/- per Pc.
CA.Madhavan
(Chartered Accountant)
(942 Points)
Replied 05 September 2008
So it should be taken at average cost.........ok got it....
CA.Madhavan
(Chartered Accountant)
(942 Points)
Replied 05 September 2008
thank you very much to Naveen and Salman
CAclubindia
