Scraping of packing material
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
13 October 2011
Can you pls clear my doubt as below?
I am having some packing material in my closing stock which values rs.10000 (1000nos @rs.10/- each)
Since these packing materials are not in good condition, I would like to scrape it and sell it in local market for Rs 4000/- (1000 nos @Rs.4/- each)
Now, my doubt is whether I have to make the provision for the unrealized money of Rs.6000/- in my book.
Is it compulsory to provide as per AS?
I am having some packing material in my closing stock which values rs.10000 (1000nos @rs.10/- each)
Since these packing materials are not in good condition, I would like to scrape it and sell it in local market for Rs 4000/- (1000 nos @Rs.4/- each)
Now, my doubt is whether I have to make the provision for the unrealized money of Rs.6000/- in my book.
Is it compulsory to provide as per AS?
16 November 2011
The loss on sale of scrap will be charged as an expense to the P&L Account.
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