waht should be value of sales in trading account
This query is : Resolved
09 November 2010
Dear Experts
plz go through the below mentioned journal entries and suggest me that what value of the sales will appear in the trading account
our company a manufacturer units sold goods on credit to Glaxo Smith Kline Consumer Ltd
and charged excise and vat there on as mentioned follow
Glaxo Smith Kline Consumer Ltd ---a/C Dr Rs 80563
To Sales--------------Rs 74400
To Excise Duty @4%----Rs 2976
To education Cess@2%on excise-Rs59.52
To H.Edu cess@1%on excise-Rs ---29.26
To AP VAT@4%--------Rs 3098.61
what value of sales will appear in the trading account i think it will be net sales value only not the total value of the bill.
Thanks & Regrds
Shambhu Jha
Dear Experts
plz go through the below mentioned journal entries and suggest me that what value of the sales will appear in the trading account
our company a manufacturer units sold goods on credit to Glaxo Smith Kline Consumer Ltd
and charged excise and vat there on as mentioned follow
Glaxo Smith Kline Consumer Ltd ---a/C Dr Rs 80563
To Sales--------------Rs 74400
To Excise Duty @4%----Rs 2976
To education Cess@2%on excise-Rs59.52
To H.Edu cess@1%on excise-Rs ---29.26
To AP VAT@4%--------Rs 3098.61
what value of sales will appear in the trading account i think it will be net sales value only not the total value of the bill.
Thanks & Regrds
Shambhu Jha
09 November 2010
Dear Shambhu
Your opinion for not including tax in valuation of sales is correct, to the extent your ques. is limited to accounts only.
But from income tax Act point of view as per section 145A one need to value Sales, purchases , stock including taxes i.e taxes is to be routed through Trading and p&l A/c.
One should note that there is no effect to profit or loss no matter which poliocy is followed
But one can Follow the policy as per your opinion and for income tax purpose one can show through reconciliation statement that there is no difference in profits/loss.
Your opinion for not including tax in valuation of sales is correct, to the extent your ques. is limited to accounts only.
But from income tax Act point of view as per section 145A one need to value Sales, purchases , stock including taxes i.e taxes is to be routed through Trading and p&l A/c.
One should note that there is no effect to profit or loss no matter which poliocy is followed
But one can Follow the policy as per your opinion and for income tax purpose one can show through reconciliation statement that there is no difference in profits/loss.
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