Hello,
I am Working with a Trading firm of stationery products.
We procure A4 Size Paper Rim say 1000 Rims @ Rs. 200 each and paid a Excise Rate of 10.3% on the same. We do not have Excise setoff. Now for stock valuation purpoe, should we consider a total value paid i.e Rs. 2,20,600 as a stock valuation which results in Rs. 220.60/ Rim (Consider Weighted Ave. Method & Opening Stock is Zero)
Is this a correct way ?
| Originally posted by : Pariksh*t Bapat | ||
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Hello, I am Working with a Trading firm of stationery products. We procure A4 Size Paper Rim say 1000 Rims @ Rs. 200 each and paid a Excise Rate of 10.3% on the same. We do not have Excise setoff. Now for stock valuation purpoe, should we consider a total value paid i.e Rs. 2,20,600 as a stock valuation which results in Rs. 220.60/ Rim (Consider Weighted Ave. Method & Opening Stock is Zero) Is this a correct way ? Have i posted wrong query ? |
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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 ?
CAclubindia
