Purchase of Packing materials!!!...Urgent Sir!!

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Rajesh (Querist)
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01 September 2010 Dear Experts,
In a private limited company, they are purchasing packing materials which are used for delivering the goods when it is sold.
1)In such a case can those packing materials purchased be classified as Purchases and classified as Direct Expenses in the Tally?
2)Can i classify them as Selling & Distribution Expenses?
Thanks for the reply...
With regards,
Rajesh.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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01 September 2010 Direct expenses as it is in relation to sale and also not purchase as the company is not trading in packing material.

However at the year end do show the stock of materials as closing stock.

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CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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01 September 2010 If the packing material is of nature that can not be isolated from the final output, then it can be included in purchased.

e.g main wrapper of soap, main can of tooth powder etc.

But if you are talking of packing materials like cartons etc for bulk sending, then it may be added to the selling & distribution cost.

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