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Entry for receipt of stock as finished goods

CA Siddhartha Bhardwaj (Proprietor at Siddhartha Bhardwaj & Associates Chartered Accountants) (33441 Points)

02 January 2011

I would like to know how to pass an entry for receipt of stock as donation in Tally. The company is maintaining accounts with inventory.

If I debit stock A/c, the stock is displayed twice in the Balance Sheet. One, under the head of Stock A/c and the other under the head of Closing Stock.

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11 Replies

Devendra (Chartered Accountant) (4775 Points)
Replied 02 January 2011

I think so the entry will be

Stock A/c Dr. XX

To Donation A/c XX

(Being Stock received as Donation)

Regards,

Devendra

1 Like

Balakrishnan (Proprietor) (342 Points)
Replied 03 January 2011

In accounting softwares i don't think you will be able to post any entry directly to stock a/c. You have route them only through purchases or stock transfers.

The query can be solved as below:

1) Purchase A/c. Dr.

To Donor A/c.

(with value of donation or cost of goods at market rate)

2)Donor A/c Dr.

To Donation A/c

1 Like

muraligopoavarapu (article student) (63 Points)
Replied 03 January 2011

I think Devendra is correct.

donation a/c is created in in indirect income group.

your second qestion answer is stoct is visible in stock and closing stock.

if you are enterd the stock is how to consumed in tally by passing an journal it will dis appier in closing stock

jayant singh kalra (as) (56 Points)
Replied 03 January 2011

Entry will be

stock a/c dr

To donation a/c

& keep the head of stock under head of purchase ur problem will be solved

RAMSANKAR MISHRA (service) (44 Points)
Replied 03 January 2011

As in return of the donation you are neither creating any liability nor paying any amount in return of that.So We can not pass any puchase entry for it. We can pass a Journal Entry for it. In passing the JV link the same to the stock which ur getting as donation by creding to donation under Miscellaneous Income under Profit and Loss Account.

CA Pramod Kulkarni (Practicing Chartered Accountant) (80 Points)
Replied 04 January 2011

Hi friends my query is that, if you include the donations (stock items) in the stock , how will you compute the value of closing stock as per AS-2 ? Please Reply ?

Balakrishnan (Proprietor) (342 Points)
Replied 05 January 2011

Please ready my reply above. That takes care of all your doubts.

Vishal Sharma (JM) (85 Points)
Replied 07 January 2011

I think for receiving goods as Donation no entry will be passed because in Accounting every entry must be in monetary terms and goods received as donation are free of cost hence no entry will be passed and only quantity must be increased by entering in stock register.

CA P KARTHIKA (Chartered Accountant) (715 Points)
Replied 07 January 2011

For receipt of stock we can pass entry in stock journal and donation we can account in receipts by transfering it to p&L a/c... then stock wont appear twice.... Kindly reply if u solved it before

Vishal Sharma (JM) (85 Points)
Replied 08 January 2011

Valuing finished goods as per AS-2 only quantity is increased while no amount will added

for example previously 1000 items @ rs 12 per item total value=12000.

Goods received as donation 100 items free of cost. value=nil

Hence totals items =1100 & value=12000 applying weighted average cost formulae 12000/1100=10.90 per item.

This treatment is similar Bonus Shares valuation as per AS-13 Valuation of Investments. where only no. of shares is increased and no amount will be added