Professional Documents
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Materials A/c
Particulars $ Particulars $ Particulars
Opening Balance 110,520.00 WIP A/c 811,000.00 Finished Goods
Accounts Payable A/c 825,000.00 Closing Balance 124,520.00
935,520.00 935,520.00
2,158,992.00 2,158,992.00
552,840.00 552,840.00
Other Assets
Manufacturing Plant at Cost 2,822,400.00
Less: Accumulated Depreciation -1,047,600.00
Total Assets
Question 3.
Management will not be able to to achieve its note payable repayment goal while maintaining a cash balance of $15
Question 4.
Inventory Turnover ratio 2009 was 2.88 times and in 2010 it declined to 2.55 times indicating that the inventory turn
Question 5.
Company's Trade Creditors rose from previous year indicating a higher liability, more payment needs to be done if th
WIP A/c
Particulars $ Particulars $
Opening Balance 172,200.00 Transfer to Finished Goods 1,901,952.00
Cash A/c 492,000.00 Closing Balance 209,848.00
Cash A/c 198,000.00
Cash A/c 49,200.00
Cash A/c 135,600.00
Depreciation A/c 140,400.00
Supplies A/c 61,200.00
Material A/c 811,000.00
Cash A/c 52,200.00
2,111,800.00 2,111,800.00
Supplies A/c
Particulars $ Particulars $
Opening Balance 17,280.00 WIP A/c 61,200.00
Accounts Payable A/c 66,000.00 Closing Balance 22,080.00
83,280.00 83,280.00
2,562,000.00 2,562,000.00
1,806,624.00 1,806,624.00
2,822,400.00 2,822,400.00
0
$ $
150,000.00
201,360.00
124,520.00
209,848.00
352,368.00
22,080.00 708,816.00
92,520.00
1,152,696.00
2,822,400.00
-1,047,600.00 1,774,800.00
2,927,496.00
288,360.00
259,200.00
5,800.00
553,360.00
1,512,000.00
862,136.00 2,374,136.00
2,927,496.00
$ $
2,562,000.00
19,200.00
49,200.00
2,493,600.00
1,806,624.00
686,976.00
522,000.00
164,976.00
38,400.00
126,576.00
58,000.00
68,576.00
36,000.00
g that the inventory turnover goal set by the management was not fulfilled.
-Customs duty on Raw materials/Finished goods lying in bonded warehouse are provided for at the applicable rat
duty is transferred to consignee.
-Excise duty on finished stocks lying at manufacturing locations is provided for at the assessable value applicable
end use. 1.10.4. -The net realisable value of finished goods and stock in trade are based on the inter-company tra
prices (applicable at the location of stock) for sale to oil marketing companies and retail consumers respectively. F
valuation, the proportion of sales to oil marketing companies and retail consumers are determined on all India ba
valuation at all locations.
-Raw Materials held for use in the production of finished goods are not written down below cost except in cases w
declined and it is estimated that the cost of the finished goods will exceed their net realisable value.
-Obsolete, slow moving, surplus and defective stocks are identified at the time of physical verification of stocks an
made for such stocks.
Revenue Recognition (Sales Method)
Sale of goods Revenue from the sale of goods is recognised when the significant risks and rewards of ownership o
buyer, the Corporation retains neither continuing managerial involvement to the degree usually associated with o
over the goods sold, revenue and the associated costs can be estimated reliably and it is probable that economic
transaction will flow to the Corporation.
Revenue from the sale of goods includes excise duty and is measured at the fair value of the consideration receiv
fair value allocations related to multiple deliverable and/or linked arrangements), net of returns, taxes or duties c
Government and applicable trade discounts or rebates.
Revenue is allocated between loyalty programmes and other components of the sale. The amount allocated to th
and is recognised as revenue when the Corporation has fulfilled its obligation to supply the products under the te
is no longer probable that the points under the programme will be redeemed.
Where the Corporation acts as an agent on behalf of a third party, the associated income is recognised on a net b
-Claims in respect of subsidy on LPG and SKO, from Government of India are booked on in principle acceptance th
instructions / clarifications, subject to final adjustments as stipulated.
-Construction contracts Revenue from Construction contracts arise from the service concession arrangements en
certain arrangements involving construction of specific assets as part of multiple deliverable arrangements. 182 B
Limited Contract revenue includes the amount agreed in the contract to the extent that it is probable that they w
measured reliably. If the outcome of the construction contract can be estimated reliably, then contract revenue is
and Loss in proportion to the stage of completion of the contract. The stage of completion is assessed with refere
cost incurred as compared to the total estimated cost of the related contract. Otherwise contract revenue is reco
contract costs incurred that are likely to be recoverable. Contract expenses are recognised as incurred unless they
contract activity. An expected loss on a contract is recognised immediately in the Statement of Profit and Loss.
-Interest income is recognised using effective interest rate (EIR) method.
-Dividend is recognised when right to receive the payment is established, it is probable that the economic benefit
will flow to the entity and the amount of dividend can be measured reliably.
-Income from sale of scrap is accounted for on realisation.
-Claims other than subsidy claims on LPG and SKO from Government of India are booked when there is a reasona
entories comprises of expenditure incurred in the normal
riate overheads apportioned on a reasonable and consistent
d on First in First out basis.
n weighted average basis.
sion.