Accounting For Business 25 OctoberPresentation Transcript
ACCOUNTING FOR BUSINESS AFTERSCHO☺OL – DEVELOPING CHANGE MAKERS CENTRE FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME – World’ Most Comprehensive programme in social entrepreneurship & spiritual entrepreneurship OPEN FOR ALL FREE FOR ALL
ACCOUNTING FOR BUSINESS Dr. T.K. Jain. AFTERSCHO☺OL Centre for social entrepreneurship Bikaner M: 9414430763 [email_address] www.afterschool.tk , www.afterschoool.tk
Question on FIFO
Young Entrenpreneurs Ltd. has furnished the following details
Date Particulars Units Rate (Rs.)
01.03.2008 Opening stock 100 1.75
05.03.2008 Purchased 150 1.50
12.03.2008 Purchased 300 1.60
08.03.2008 Issued 200 -
18.03.2008 Issued 250 -
What is the value of closing stock using FIFO method:
THE CLOSING STOCK IS OF 100 UNITS. Thus this closing stock will be valued at the last rate so
100*1.6 = 160 is the closing stock. Answer.
Find the value of closing stock using LIFO principle
The following are the details supplied by Greenguards Ltd.. in respect of its raw materials for the Month of December, 2007
Date Receipts price issues
01.12.2005 2,000(Opening) 5
07.12.2005 1,000 6
10.12.2005 - - 2,500
15.12.2005 2,000 6.50
31.12.2005 - - 2,200
On 31.12.2007, a shortage of 100 units was found
= (2+1+2) – (2.5+2.2)= .3 thousand
However, 100 units are normal loss
Thus we shall value closing stock for 200 units. Thus closing stock is 200 * 5 (the rate of the first material) = 1000.
In LIFO, the last material goes first, so what is left is with the first rate.
Valuation of Stock
Physical verification of stock was done on 23rd October. the value of stock was Rs 4,80,000 following transactions took place between 23rd October and 31 October —
1. Out of goods sent on consignment, goods costing Rs 24,000 were unsold.
2. Purchases of Rs 40,000 were made, out of which goods worth Rs 16,000 were delivered on 5th November
3. Sales were Rs 1,36,000, which include goods worth Rs 32,000 sent on approval. Half of these goods were returned before 30th June, but no intimation is available regarding the remaining goods. Goods are sold at cost plus 25%. However, goods costing Rs24,000 had been sold for Rs12,000.
You want to determine the value of stock on 31 October.
Stock on 23 October 480000
Add 24000 unsold
Add purchases (40000 – 16000)=24000
Sales (136000 – 32000) = 104000
Sales includes abnormal sales 24000
Normal sales (80000+16000)*100/125
Less -Cost of sales = 76800 + 24000
What is the closing stock & depreciation?
Ajay Saharan Inc.: Assets Balance on 01.01.2008 is Rs 28,000. The Company purchased during the year Rs 16,000 Depreciation is to be charged on the assets as follows — 1/5th of their values is to, be written off in the year of purchase and 2/5th in each of the next 2 years. Of the stock as on 01.01.2008, ½ was one year old and ½ was 2 years old.
Dep on goods purchased 16000*1/5 =3200
½ of the goods were 1 year old and ½ 2 year old. So solve it as follows:
7000 on assets of 14000 purchased 1 year back and 14000 on assets purchased 2 years back.
Thus total dep. = 3200+7000+14000=24200 answer.
Afterschoool conducts three year integrated PGPSE (after class 12 th along with IAS / CA / CS ) and 18 month PGPSE (Post Graduate Programme in Social Entrepreneurship) along with preparation for CS / CFP / CFA /CMA / FRM . This course is also available online also. It also conducts workshops on social entrepreneurship in schools and colleges all over India – start social entrepreneurship club in your institution today with the help from afterschoool and help us in developing society.
Why such a programme?
To promote people to take up entrepreneurship and help develop the society
To enable people to take up franchising and other such options to start a business / social development project
To enable people to take up social development as their mission
To enable people to promote spirituality and positive thinking in the world
Who are our supporters?
Afterschoolians, our past beneficiaries, entrepreneurs and social entrepreneurs are supporting us.
You can also support us – not necessarily by money – but by being promotor of our concept and our ideas.
About AFTERSCHO☺OL PGPSE – the best programme for developing great entrepreneurs
Most flexible, adaptive but rigorous programme
Available in distance learning mode
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Designed to make you entrepreneurs – not just an employee
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Workshops from AFTERSCHO☺OL
ICSI Hyderabad Branch
Gyan Vihar, Jaipur
Apex Institute of Management, Jaipur
Aravali Institute of Management, Jodhpur
Xavier Institute of Management, Bhubaneshwar
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Study exchange programme (with institutions out of India)
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AFTERSCHO☺OL will shortly open its branches in important cities in India including Delhi, Kota, Mumbai, Gurgaon and other important cities. Afterschooolians will be responsible for managing and developing these branches – and for promoting social entrepreneurs.
We want to write case studies on social entrepreneurs, first generation entrepreneurs, ethical entrepreneurs. Please help us in this process. Help us to be in touch with entrepreneurs, so that we may develop entrepreneurs.
Basic values at AFTERSCHO☺OL
Share to learn more
Interact to develop yourself
Fear is your worst enemy
Make mistakes to learn
Study & discuss in a group
Criticism is the healthy route to mutual support and help
Ask fundamental questions : why, when, how & where?
Embrace change – and compete with yourself only
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