Stock valuation

Yes ,your valuation should be Rs 220.60 ps/rim,since you are bearing the ED on the product.

kkm

Since you are not getting excise credit , excise duty paid is your cost for a rim of Rs.200.+ Rs20 Hence loading the Excise on the inventory is appropriate.

Now Next to Above Situation.

If I have paid Rs. 500/- To auto for the transportation of 1000 Rims then My Total Expenses Will Be as follows

Rim Qty 1000                =   2,00,000

Excise Duty paid          =       20,600

Trsportation Charges  =            500

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Total Exp. for 1000 Rim = 2,21,100

Now Again the stock valuation will be Rs. 221.1/ Rim (221100/1000). Am I Correct ?

But what about the Accounting Entry in above case? (Consider the Freight is Paid in Cash to Different party)

Raw material A/c                    Dr           220600

Transportation charges A/c      Dr                 500

         To Creditors                                                            220600

          To Creditors (Different party)                                          500

This reveles that the stock valuation is not merely dependent on the Purchase Account. I need to take in to consideration the expense account as well corresponding to each GRN I made for the product.

Am I Correct ?

I Wish To to know that, Stock Valuation will not actuallly dependant only on Purchase Account but also the corresponding Wxpense Account related to each GRN.

Am I Correct ?