Physical verification of stock in a business was done on 23 rd June, 2023. The value of the stock was - 4,80,000. The following transactions took…

CA Foundation · Accounting · PYQS · September 2024
Physical verification of stock in a business was done on 23 rd June, 2023. The value of the stock was - 4,80,000. The following transactions took place between23 rd June, 2023 and 30 th June, 2023: (i) Out of the goods sent on consignment, goods at cost worth - 24,000 were unsold. (ii) Purchase of 40,000 were made out of which goods worth - 16,000 were delivered on 5 th July, 2023 (iii) Sales were - 1,36,000 which include goods worth - 32,000 sent on approval. Half of these goods were returned before30 th June, 2023, but no information is available regarding the remaining goods. (iv) Goods are sold at cost plus25%. However, Goods costing - 24,000 had been sold for 12,000. Determine the value of stock on 30 th June, 2023.

Suggested Answer and Working Notes:

Statement of Valuation of Stock on 30 th June, 2023 Particulars ₹ Value of stock as on 23rd June, 2023 4,80,000 Add: Unsold stock out of the goods sent on consignment 24,000 Purchases during the period from 23 rd June, 2023 to 30 th June, 2023 24,000 Goods in transit on 30 th June, 2023 16,000 Cost of goods sent on approval basis (80% of 16,000) 12,800 76,800 5,56,800 Less: Cost of sales during the period from 23 rd June, 2023 to 30 th June, 2023 Sales (₹ 1,36,000 -16,000) 1,20,000 Less: Gross profit 9,600 1,10,400 Value of stock as on 30th June, 2023 4,46,400 Working Notes: 1. Calculation of normal sales: Particulars ₹ Actual sales 1,36,000 Less: Abnormal sales 12,000 Return of goods sent on approval 16,000 (28, 000) 1,08,000 2. Calculation of gross profit: Particulars ₹ Gross profit or normal sales - 20/100 x 1,08,000 21,600 Less: Loss on sale of particular (abnormal) goods (₹ 24,000 -12,000) (12, 000) Gross profit 9,600 Alternatively, the value of stock as on 30th June, 2023 can also be calculated using trading Account. In that case the solution will be Trading Account for the period from 23 rd June to 30 th June Particulars ₹ Particulars ₹ To Opening Stock 4,80,000 By Sales including abnormal sales 1,20,000 To Purchase 40,000 By Closing stock as on June, 30 (b/f) 3,93,600 Less: Goods In transit 16,000 24,000 To Gross Profit (W.N.) 9,600 5,13,600 5,13,600 Statement of valuation of stock on 30th June, 2023 Particulars Particulars ₹ Value of stock as per Trading Account 3,93,600 Add: Unsold stock out of the Goods sent on consignment 24,000 Goods in Transit 16,000 Cost of goods sent on approval basis (80% of16000) 12,800 52,800 Value of stock as on 30 th June, 2023 4,46,400 Working Notes: 1. Calculation of normal sales: Particulars ₹ Actual sales 1,36,000 Less: Abnormal sales 12,000 Return of goods sent on approval 16,000 (28, 000) 1,08,000 2. Calculation of gross profit: Particulars ₹ Gross profit or normal sales - 20/100 x 1,08,000 21,600 Less: Loss on sale of particular (abnormal) goods (₹ 24,000 -12,000) 12,000 Gross profit 9,600

Topics: Inventories

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