Dear CCI friends,
I have a question.
A manufacturing company purchased 100 Nos. of Product X
Purchase price of X is Rs. 100.
The Market price of X is Rs. 90.
The item of 50 Nos. were sold at Rs.150 per unit.
What will be the value per unit of closing stock remaining ?
CMA Dinesh Kumar Singh
(Manager - Finance)
(62 Points)
Replied 14 August 2013
Inventory is valued at cost or market price which ever is lower. In this case the cost price or purchase value is Rs. 100 and the resentely sold price is Rs. 150.
Hence the remaining qty will be valued at Rs. 100.
Vikram Bhatia
(CA Final)
(122 Points)
Replied 14 August 2013
From my point of view, Market Price will be considered as 90 for closing stock valuation purpose and when we compared with its cost, Market Price will be lower.
So remaining qty should be valued at Rs. 90
as per AS-2, Raw material is valued as follows :
if RM is incorporated in F.G. which is expected to be sold at cost or above thn valuation should be done at cost only.
if RM is incorporated in F.G. which is expected to be sold at lower then cost thn valuation is done at cost or current purchase price whichever is lower .
sajid
(Auditor)
(214 Points)
Replied 15 August 2013
Here, for the calculation of Stock, you must take Purchase Value or Sale Value , whichever is less.
Market value is nothing to do here.
Unit value of Product X is Rs.100/-
satish kumar Chauhan
(accountant)
(353 Points)
Replied 16 August 2013
Dear Jiju
if you purchased this item for resale purpose without altration the quality and shape, than value of inventory will be at cosr price and if you sale after any change the quality or any way and the market price always lower than cost price, than inventory value will be cost or market price wich is lower.
thanks
CA Subin VR
(Practicing CA)
(450 Points)
Replied 17 August 2013
| Originally posted by : CA Subin VR | ||
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There should not be two market for the same product. If market value is Rs.90 then net realisable value will also be Rs.90/- It should be valued at Rs.90/- |
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Dear Subin, Suppose there is another market, say a special zone where only these goods are sold at 150.
CAclubindia
