Dear members,
We are a textile (blankets) manufacturing company, who import raw material and produce blankets in our factory and sells in local market. Can you please tell me which methiod to be used to calculate value of Finished goods produced lying in the store at the time of finalising acccount books.
Thanks and regards
Ajay Singh
at cost Method ( FIFO, at cost or market value which ever is less, average, weight average,Production cost )
Manufacturing concern Three type stock
1.Raw Material
2.Work in Progress
3.Finished Stock
1. Valuation for Raw Material
Purchase Cost , FIFO, average, Weighted Average
2. Valuation for WIP
Purchase Cost -
Add:- Process Cost -
3. Valuation for Finished Stock
Purchase Cost -
Add:-Process Cost -
Add:- other expenses needed for Closing Stock -
Note:- 1.Purchase Cost means = Item Purchase Price +Duty+Tax+Cess (if not refundable)+Freight, Insurance,Loading/Unloading Etc.
2.Selling & distribution expenses not included for stock valuation
3. interest on loan not included
In financial Accounts, Cost of production or Market value whichever is less
In Cost Accounts only cost of production.
Cost of production should be calculated as per the Cost Accounts prepared under Cost accounting standards issued by the ICAI(CMA).
Is Social Welfare considered a part of stock valuation in manufacturing industry. Please explain with reasoning.
social welfare will not be part of valuatioen of closing stock because production would not be affacted if we do not incurr exp on social welfare.
If sales Challan of Goods costing Rs.50000 is made on 31-3-2017. But actual sale invoice is made on 25-4-2017 @ 45000.
How the same should be treated in books??
Q 1 :- How the stock out should be treated as in March only inventory is out but accounting effect has taken place?
Q 2 :- Profit/Loss of this sales should be booked in which year ?
Q 3 :- Stock valuation method - Cost or Sale Value (since in this case Sale Value is lower than Cost) ?
CAclubindia
