INVENTORIES

Question 1

VALUE GOODS TO BE TAKEN

Answer 1

COST OR NET REALISATION VALUE WHICHEVER IS LOW

Question 2

WHAT IS NRV (net realizable value)

Answer 2

Net Realizable Value (NRV) = Estimated Selling Price – Estimated Selling Expenses (like cost of completion, selling, distribution costs, etc.)

Question 2

TRADE DISCOUNT
TAX

Answer 2

MINUS
ADD

Question 2

COGS

Answer 2

OPENING STOCK + PURCHASE- SALES AT COST = CLOSING STOCK

Question 2

SELLING PRICE OF GOODS- GROSS PROFIT%=

Answer 2

COST OF INVENTORY

Question 2

GROSS PROFIT% =

Answer 2

GROSS PROFIT/ TOTAL SALES
(sales+ assume one too)

Question 3

AT THE TIME OF INVENTORY TAKING A ITEM WAS WRITTEN OFF $17500 which was purchased of $50000

Answer 3

KOI ABNORMAL ITEM HOGA JO 50000K KA tha aur 17500k already minus ho chuka hai to baaki ka 32500 ko bhi minus kardo

Question 4

AND when the abnormal item was sold during the year for 45000k

Answer 4

so then u have a abnoral item in ur sales so u have to minus the abnormal sale from it

Question 5

GROSS RPROFIT =

Answer 5

SELLING PRICE- COGS

Question 6

SELLING EXPENSES COGS MEI NAHI AATE HAI BECAUSE

Answer 6

WO GOODS ALREADY BANNE KE BAAAD HOTA HAI SO JUST P@L

Question 7

RATIOS TO REMEMBER

Answer 7

PROFIT MARGIN OF 33.33% ON COST MEANS 25% ON SALES

Question 8

IF THERE IS A SALES RETURN TOO WITH THE GP GIVEN ( ex- 25% etc)

Answer 8

THEN AS U MINUS THE GP FROM SALE DO IT FROM SALES RETURN TOO IF ITS ON MARKED UP PRICE

Question 9

MARKED UP PRICE

Answer 9

INCLUDING PROFIT

Question 10

SOGRA GOODS

Answer 10

SALE OF GOODS ON RETURN AND APPORVAL BASES

Question 10

FORWARD INVENTORY VALUATION MEI SOGRA WALE GOOD HOTE HAI

Answer 10

IGNORED

Question 11

ILLUSTRATION 9 ADJUSTMENT 3

Answer 11

1) goods of $10000 sent on approval basis jisme se 40% aaagye = 4000 already in godown
2) bachhe 6000 ke goods wo aapka usme se 20% is ur GP
3) so u need to bring it on cost so 80%
4) so the cost value will be “4800”
( 80% of 6000)

Question 11

SOGRA ke goods jo hote hai sales considered uspe bhi

Answer 11

Gross profit ka percentage lagta hai to bring it down to the cost

Question 12

SOGRA ADJUSTMENTS

Answer 12

1)if received before PV date
= IGNORED ( as already counted hoga)
2) if SOLD AFTER YEAR END BUT BEFORE PV
= “COUNTED AS SALE” ON COST(-)
the 9th illustration wala 80% of 6000 wala
3) GOODS BELONGING TO ME LYING WITH OTHERS
=ADD (+)

Question 13

AGAR SALES RETURN KA CLEARLY MENTIONED NAHI HAI KE KISPE KRNA HAI TO

Answer 13

ALWAYS ASSUME KE WO MARKED UP PRICE/ YAA SALES PRICE PE HAI which includes profit automatically so MINUS GP to bring it on cost

Question 14

IN the end of the sum

Answer 14

sales mei se GP minus karna hota hai