Query CA

747 views 5 replies

MPR Sanjay Kumar

3145 Points Posted on 06 October 2021

joy LTD purchased 20,000 kilograms of raw material @ rs 20 per kilogram the year 20-21.

opening inventory:. units. amount

finished goods. 2000. 100000
Raw materials. 2200. 44000
direct labour. 306000
fixed overheads. 300000
sales. 20000. 1120000

closing inventory:
finished goods. 2400
materials raw. 1800

The plant has a capacity to produce 30,000 units of finished product per annum.however the actual production of finished products during the year 2020-2021 was 20400 units.due to fall in the market demand the price of the finished goods in which the raw material has been utilised is expected to be sold for rupees 40 per unit. The replacement cost of the raw material was rupees 19 per kg.

you are required to ascertain the value of closing inventory as at 31st March 2021 as per accounting standard 2.

plse explain me

Replies (5)

yasaswi gomes

My grammar is 💯 good I

7301 Points Posted on 06 October 2021

on the cost basis, it is thirty point forty two laks worth of closing inventory. could not post the problem here. Please tell me what is the text book that you got this question from

yasaswi gomes

My grammar is 💯 good I

7301 Points Posted on 06 October 2021

i meat 38,42 lakhs like I have metioned in the PM i have sent

yasaswi gomes

My grammar is 💯 good I

7301 Points Posted on 07 October 2021

Finished goods is 22400 and it says 20400. To calculate the inventory, either way, perpetual/periodic, is calculated only for one year/period. 2000 difference exists. For the time being, it is not possible to calculate NRV. I'll give it a look tomorrow as well.

yasaswi gomes

My grammar is 💯 good I

7301 Points Posted on 11 October 2021

Yes, like I mentioned before, there is a problem with numbers. Inventory is like valued into finished goods and sold off as per batches. For this period 20,000 sales and 400 left finished goods. Then you have eighty thousand finished goods for which the value of production is unknown. Things must be given with dates, qty, amounts. Only then it can be sorted out.

yasaswi gomes

My grammar is 💯 good I

7301 Points Posted on 11 October 2021

Sorry it’s not about the 80 thousand, it’s about the finished goods and produced goods difference. You can ask you teachers. They will have answers. Otherwise they will think you are not educated if you don’t ask doubts. All the best.