WIP Ledgers closing

Transfer what is completed to finished goods, whatever remains you have to debit WIP closing stock a/c and transfer the balance there from this ledger. Hope this helps.

Another way to easily identify where to close ledger balances is to identify items presentation. For example:

Capital ledger= carry the difference to credit side. (B/d)

Sales ledger= carry the difference in ledgers in the credit side (b/d)

Asset ledger= carry the differences in ledgers on the debit side (b/d)

Payables ledger= carry the differences in ledger on the credit side. (B/d)

@ Ms Shreshti Agarwal explained about transferring balances, and the above method is easy to understand 

why? Because in the financial statements:

Asset is debited

Liabilities are credited

Sales is credited

Expenses are debited in the financial statements. So b/d balances are always on the debit or credit side of ledgers depending upon where they are recognised in the financial statements.

This is like thumb rule and very few people know this secret.

The below table is for calculating COGM which is not so necessary here. I am aware AS 2 includes WIP in disclosures only and IndAS 2 uses WIP for calculating NRV and cost measurement of ending inventory. So check your WIP status is valid or not as well comparing it with inventory valuations used as per standard

Beginning WIP + Manufacturing costs - Cost of goods manufactured

= Ending work in process 

Debit                                                        Credit

O/B WIP                                                  COGS

ADD materials, labor, overhead             

ENDING BALANCE

B/D Ending WIP

like I have mentioned in the first answer, debit the closing balance. There is no GAAP or accounting standard for this WIP treatment. And, IndAS 2 will include WIP into cost & NRV calculations and disclosed the carrying WIP amount. While, AS 2 discloses WIP only.

WIP a/c - balance sheet

To COS ending inventory a/c

because ending inventory comprises of 

raw material

WIP

Finished goods.

Closing the ledger? Once final balance is b/d it is closed. 

@ Stinivas

Apart from bin card or stores ledger, no other ledger is available on the net. Can you post a format?

That’s reasonable and I suspect there is no ledger for this. When c/d balance is the COGM amount technically from above formats. This makes it just a process formula which is not presentable in ledgers maybe.