1. The businessman opens container accounts to track containers used for selling goods, which are charged separately from goods. 2. Four types of container accounts are described: container stock, container trading, container debtors, and container reserve/suspense accounts. These track container inventory, profit/loss on containers, amounts owed by debtors for containers, and reserves for containers not yet returned. 3. An example transaction is provided and the corresponding journal entries are made across the four container accounts to properly track the movement and costs of containers.

1. Container Accounts
A businessman usually sells his goods in certain container or packages. He charges for these
container or packages besides charging for the price of the goods. For the accounting purpose
container accounts may be defined in to two types.
Container Accounts
Returnable Non Returnable
NonReturnable Container
In such a case container stock account is open in the books it is debited with opening stock of container
and purchase of container during the period. It is credit with amount charge to customers to container
sentto themand closingstockof container.
Returnable Container
In sucha case the followingpointare worth,
1. The firm makes an extra charge for the container send to the customer beside the usually selling
price of goods.
2. Customers are given a time limit within which they have to return containers if they show
desire.
3. The price at which the containers are taken back is lower than the price at which the customers
are charge for them.Thisisa sort of hire or desperationforthe containeruse.

2. The followingaccountsmaybe openedinthe booksforaccountsof container
1. ContainerStockAccount
This account debited with the opening stock of the container and the
purchases of container made in during period. It is credited with the value of containers scrapped,
retained by the customers and containers in stock both with the customers and the firm. The different
of the two sides of the account represent the description of the container which is transferred to the
“ContainerTradingAccount”.
2. ContainerTradingAccount
This account reveals the profit or loss made by the firm on the
container received and issued. Itis credited with the value of the containersissued to the customers and
with the amount of reserve which may be required for container with the customers in the beginning of
the year. In respect of which the “Return period” had not expired. It is debited with the value of
container returned, value of the container retained, value of container scrapped and the reserve that
may required in respect of container still with the customer at the end of the period in respect on which
the return period has not yet expired. The difference of the two sides of this account represents the
profitor lossmade on the containersduringaparticularperiod.
3. ContainerDebtors
This account is debited with the money due by the Debtors in the beginning of
the period and the value of the container sent. It is credited by the value of container return by them
and the moneysentbythem.
4. Containerreserve /suspense account
This account is kept simply to keep a reserve in respect of
those containers which are still lying with the customers and in respect of which are the return period
has notexpired.

3. Eg: - L Ltd sells oil in drums which are charged at 10/= each. Customers returning drums within a month
are creditedwith8/=.The followinginformationavailablefromthe booksof L Ltd.
Returnable drums as at 01.01.2013 4,000
Drums physically in stock as at 01.01.2013 8,000
Drums purchased in 2013 at 5/= each 30,000
Drums sent out in 2013 500,000
Drums returned by customersin 2013 480,000
Drums scrapped in 2013 (sold for 5,000) 2,000
Drums sent out in December 20013 lying with customers 10,000
All drumsas at 01.01.2013 were valuedatRs 2 each
All drumsas at 31.12.2013 are to be valuedat 50% below costprice
Amount due from debtors as at 01.01.2013 10,000
Amount receivedfrom debtors during the year 1,100,000
Write up above transactioninthe bookshopL Ltd

4. Drums Stock Account
Qty Rate Amount Qty Rate Amount
Balance
B/D
Debtors 4,000 2 8,000 D. Trading Acc 2,000 2 4,000
Stock 8,000 2 16,000 D. Trading Acc 14,000 40,000
Purchase 30,000 5 150,000 D. Trading Acc 65,000
Balance C/D
Debtors 10,000 2.5 25,000
Stock 16,000 2.5 40,000
42,000 174,000 42,000 174,000
Drums Trade Account
Qty Amount Qty Amount
Drum Debtors 480,000 3,840,000 Drums DebtorAcc 50,000 5,000,000
D. Stock Scrapped 2,000 4,000 Salesof scrapped 2,000 5,000
D. Reserve 10,000 80,000 Drums Reserve 4,000 32,000
D. Stock 14,000 40,000
D. Stock Depreciation 65,000
1,008,000
506,000 5,037,000 506,000 5,037,000

5. Drums Debtors Account
Qty Amount Qty Amount
Balance B/D 4,000 10,000
Drums Trading
Account 480,000 3,840,000
Drums Trading
Account 500,000 5,000,000 Cash 1,100,000
Retain 14,000
Stock 10,000 70,000
504,000 5,010,000 504,000 5,010,000
Drums Reserve Account
Qty Amount Qty Amount
Drums Trading
Account 4,000 32,000 Balance B/D 4,000 32,000
Balance C/F 10,000 80,000 Drums TradingAccount 10,000 80,000
504,000 5,010,000 504,000 5,010,000
Balance B/D 10,000 80,000

6. Eg:- A manufacture sells his goods to customers in containers. The following information is given in
respectof the year 2012/2013.
Purchased during the year 60,000, Container sent out to customers 50,000, Container fully destroyed
200 containers,soldasscrapped(Rs.1000) 400 containers.
Stock as at stores01.04.2012 12,000 containers.
Stock with customers on 31.013.2013”Returnable” 10,000 containers return from customers 4,000
containers.Stockwithcustomerson01.04.2012 “Returnable”6,000 containers.
Debtorsdue on 01.04.2012 50,000
Purchases during the year amount to 600,000. Hire charges is Rs 4 per container. Chargeable price is
80% above cost.Cost price of the containerwasconstant overthe last3 years
You are require to prepare Container Stock account, Container Trading account, Container suspense
account and containerdebtors account
Drums Stock Account
Qty Rate Amount Qty Rate Amount
Balance B/D
Customers 6,000 10 60,000 D. Trading Acc 200 10 2,000
Stock 12,000 12 120,000 D. Trading Acc 400 10 4,000
Purchase 60,000 10 6,000,000 D. Trading Acc 42,000 10 420,000
Balance C/D
Customers 10,000 10 1,000,000
Stock 25,400 10 254,000
78,000 78,000 78,000 78,000

7. Drums Trade Account
Qty Rate Amount Qty Rate Amount
C. Stock Acc 2,000
C. Debtorssent
out 50,000 18 900,000
C. Stock Acc 400 10 4,000 Cash 400 1,000
C. Stock Acc 4,000 14 56,000 C. suspense a. 6,000 14 84,000
C. Stock Acc 42,000 10 420,000
C. suspense a. 10,000 14 1,400,000
P & L 363,000
56,400 985,000 56,400 985,000
Drums Suspense Account
Qty Rate Amount Qty Rate Amount
C. tradingacc 6,000 14 84,000 Balance B/D 6,000 14 84,000
C. tradingacc 10,000 14 140,000
Balance C/D 10,000 14 140,000
16,000 224,000 16,000 224,000
Balance B/D 10,000 14 140,000

8. Drums Debtors Account
Qty Rate Amount Qty Rate Amount
Balance B/D 6,000 50,000 C. tradingacc 4,000 14 56,000
C. tradingacc 50,000 18 900,000 Retained 42,000 14 588,000
ClosingStock 10,000 14 140,000
Balance C/D 16,600
56,000 950,000 56,000 950,000
Balance B/D