Dear Chartered Accountants,
Jain enterprises is a leading distributor of petrol,detail inventory of petrol in hand taken when the books are closed at the end of each month for the end month of June 21 the following information:
1. sales for the month of June 2021 was rupees 30,40,000
2. general overheads cost ruppes 4 lakhs
3. inventory and beginning 10000 litres @ 92 per litre,June 30 2021,10,000 litres @ 95 per litre
4. closing inventory 13000 litres..
compute the following by fifo method
1. valuation of inventory on 30th June 21
2. amount of cost of good sold for June 21
3.profit / loss for the month of june 2021...
please explain this problem with explanation
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PLEASE EXPLAIN As 2 valuation of inventories
Replies (25)
1. Valuation of Inventory on 30th June
Total Value 12 26 000
2. Cost of Goods sold ( FIFO Method).
= 6,44 ,000
3. profit for the month of June 21=
19 , 96 , 000
@ Dear Prasad Nillugal sir plse explain me how the Rs 12 ,26,000 value comes ?? please explain me
As per FIFO method we have sold 7000 ltr petrol out of Opining Balance 10000 ltr in the month of June
So 3000 ltr balance , then 10000 ltr new purchase for the month was also balance at the end of the month
( Closing inventory 13000 )
3000 * 92 @ 92 per ltr - 276000
10000* 95 @ 95 per ltr - 950000
-----------------------------------------------------
12 , 26 , 000
Thank you, I need also remaining cost of goods sold and profit calculation workings plse
1) As per the FIFO method , 7000 ltrs were sold out of Oping Balance 10000
7000 * 92 per ltr = 6,44, 000 ( Cost of goods sold as per FIFO method )
2) profit as on 30 th June
Profit = Sales - ( Opening Stock + Purchase + overhead - Closing Stock)
profit = 19 , 96 , 000
7000 ? how it comes?
Opining Balance 10000 ltr , purchase 10000 ltr
and you have given 13000 ltr as Closing inventory. So
Opening balances+ purchase - Closing Stock
Balance is sales .7000 .
and you have given 13000 ltr as Closing inventory. So
Opening balances+ purchase - Closing Stock
Balance is sales .7000 .
Thank you so much sir please always guide me
Are you working in biggest audit firm?
Are you working in biggest audit firm?
No , I am retired . But still having own Tax Consultancy. ( GST practitioner) .
@ Prasad Nillugal sir,sorry I didn't post the Purchase details of the sum so could you please now you analyse and explain me
1.) sales for the month of June 2021 was Rs Thirty lakh fourty thousand.
2.) general overheads cost Rs four lakh
3.) inventory at beginning 10 thousand litres @ 92 per litre.
4.) purchases_Jun 1 2021,twenty thousand litres @ 90 per litre, Jun 30 202,ten thousand litres @ 95 per litre.
5.) closing inventory 13 thousand litres...
1.) sales for the month of June 2021 was Rs Thirty lakh fourty thousand.
2.) general overheads cost Rs four lakh
3.) inventory at beginning 10 thousand litres @ 92 per litre.
4.) purchases_Jun 1 2021,twenty thousand litres @ 90 per litre, Jun 30 202,ten thousand litres @ 95 per litre.
5.) closing inventory 13 thousand litres...
Sales + closing stock - opening stock = production. But your looking for closing stock value?
1. value of inventory how to find out?? here
1. Value of closing stock- general overheads like admin and selling are not included into the closing value. So, the opening stock value is not added to the balance sheet as it is carried forward to the next year's trading account. But it will automatically addup to the existing inventory from last period. So it will be 13 at its cost.
4. You may have to calculate the way i had taught you in the morning
Purchases plus conversion costs - cost method
Market price minus selling costs -nrv
To find out which is lower of cost or NRV.
Add closing stock to this.
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