banner_ad

cs corp accounts

This query is : Resolved 
Profile Image

Profile Image

(Querist)
04 August 2021 X Ltd. has 5,000 AC in stock on 31st March, 2019. The cost of each AC amount
to `10,000. There is firm commitment of sale of 1,000 AC by the company in
April, 2019 @ `15,000 per AC. However, the general price of this AC at year end
amounts to ? 9,500 per AC. Calculate the Value of Closing Stock as per AS-2
Profile Image

Deepa B

Profile Image

Deepa B (Expert)
04 August 2021 As per AS-2, in case of finished goods, the value of stock will be lower of cost or net realizable value (NRV). In the given case Cost of AC-Rs.10,000 per AC and NRV-Rs.9,500 per AC. Lower between the two is Rs.9,500/-. Therefore value of closing stock is Rs.9,500 X Rs.5,000= Rs.4,75,00,000.
It's not prudent recognize profit on anticipated sales which is yet to be materialized. The point of firm commitment of sale is given just to confuse. Recognition of revenue associated with sales is specifically dealt in AS-9 Revenue recognition, which requires one to check whether all the conditions mentioned therein are satisfied or not.
Profile Image

CS Divesh Goyal

Profile Image

CS Divesh Goyal (Expert)
04 August 2021 value of closing stockin the given example shall be Rs.4,75,00,000 (Rs.9,500 X Rs.5,000)
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now


CCI Pro
Join CAclubindia WhatsApp Finance Community & stay updated with the latest TAX news, compliance alerts and important updates all in one place!


Similar Resolved Queries


loading


Unanswered Queries


banner

Trending Online Classes

view all classess

CCI Pro
Meet our CAclubindia PRO Members
Subscribe Now

Follow us
add to google news



Answer Query



Quick Links



Browse by Category




Latest Job Openings

View all
Company
ARTICLESHIP 27 May 2026
CA Article Trainee

Rahul Dang & Associates-Chartered Accountants

Pune

CA Inter

View Details
Company
27 May 2026
Audit Assitant

Virender K Gupta and Co

New Delhi

B.Com

View Details
Company
09 May 2026
Audit Manager

Kanna and Associates

Coimbatore

CA Inter

View Details
Company
19 May 2026
Fundraising Expert

MentorsWorld Ventures Private Limited

Ahmedabad

Others

View Details
Company
12 May 2026
Accounts Executive

Nafa Group

Mumbai

B.Com

View Details
Company
ARTICLESHIP 17 May 2026
CA Article /Trainee

Malik Sunil & co

New Delhi

CA Foundation

View Details
Company
ARTICLESHIP 15 May 2026
ARTICLE ASSISTANT, TRAINEE AND PAID ASSISTANT

YOGESH KAPOOR AND ASSOCIATES

New Delhi

B.Com

View Details
Company
22 May 2026
U.S. Financial Reporting & Consolidation Manager

Karia Overseas

Ahmedabad

CA

View Details