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  • 4) Inventory Accounting

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    Rajarshi Bhattacharyya
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    The document summarizes the inventory position of Maaldaar Company Ltd. for the fiscal year ending March 31, 2020. It provides details of purchases made during the year at different unit costs totaling 11 million units and worth Rs. 129 crores. It calculates cost of goods sold of Rs. 100 crores using FIFO and average cost method. Under LIFO, the cost of goods sold is Rs. 109 crores. Closing inventory value is Rs. 28.04 crores or Rs. 20 crores under different methods.

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    The document summarizes the inventory position of Maaldaar Company Ltd. for the fiscal year ending March 31, 2020. It provides details of purchases made during the year at different unit costs totaling 11 million units and worth Rs. 129 crores. It calculates cost of goods sold of Rs. 100 crores using FIFO and average cost method. Under LIFO, the cost of goods sold is Rs. 109 crores. Closing inventory value is Rs. 28.04 crores or Rs. 20 crores under different methods.

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    © All Rights Reserved
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    3 views1 page

    4) Inventory Accounting

    Uploaded by

    Rajarshi Bhattacharyya
    The document summarizes the inventory position of Maaldaar Company Ltd. for the fiscal year ending March 31, 2020. It provides details of purchases made during the year at different unit costs totaling 11 million units and worth Rs. 129 crores. It calculates cost of goods sold of Rs. 100 crores using FIFO and average cost method. Under LIFO, the cost of goods sold is Rs. 109 crores. Closing inventory value is Rs. 28.04 crores or Rs. 20 crores under different methods.

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    © All Rights Reserved
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    of 1

    31-Mar-20

    Maaldaar Company Ltd. - New trading Co. Inventory Position FY ending: Wt. Avg. Cost DERIVE COGS UNDER:
    Purchases: under FIFO / FIFO:
    No. of Units Unit Cost Total Cost LIFO No. of Units Unit Cost COGS
    1-Apr-19 5,00,00,000 Rs 10 50,00,00,000 Rs 10.00 5,00,00,000 Rs 10 Rs 50,00,00,000
    23-Jun-19 3,00,00,000 Rs 12 36,00,00,000 Rs 10.75 3,00,00,000 Rs 12 Rs 36,00,00,000
    15-Oct-19 2,00,00,000 Rs 14 28,00,00,000 Rs 11.40 1,00,00,000 Rs 14 Rs 14,00,00,000
    6-Feb-20 1,00,00,000 Rs 15 15,00,00,000 Rs 11.73 9,00,00,000 Total COGS Rs 100,00,00,000
    Net Realisable Value NRV as on 31-Mar-20 Rs 17
    Total Purchases 11,00,00,000 129,00,00,000 Rs 11.73 Cl. Inventory: Lower of Cost or Net Realisable Value
    2,00,00,000 COST IN (INR) Rs 29,00,00,000
    Sales for Yr. ending
    No. of Units Wt. Avg. Selling Price Net Sales NRV in (INR) Rs 34,00,00,000
    31-Mar-20 9,00,00,000 Rs 18 Rs 162,00,00,000
    AVERAGE COST METHOD: Notes: (1) Wt. Avg. Cost will not be revised at point of sale. It will be revised when fresh purchases are made.
    (2) When fresh purchases made - revised Wt. Avg. Cost will be derived from Remaining no. of units in stock (SAY A) & Wt Avg Cost per unit (say B) on one hand
    AND Fresh number of units purchased (say C) & Cost per fresh unit purchased (say D) - on the other. Revised Wt. Avg. Cost = ((A x B) + (C x D)) / (A + C)
    COGS (Op. Stock + Pur
    Op. Inventory before Purchases Sold / Revised Wt. - Cl. Stock = Units Sold
    fresh purchase (incremental) Consumed Average Cost or Consumed) X Wt.
    For Sales From: To: Will be: (units) (units) (units) (per unit) Avg. Cost per unit
    1-Apr-19 22-Jun-19 Rs 10.00 0 500,00,000 450,00,000 Rs 10.00 Rs 45,00,00,000
    23-Jun-19 14-Oct-19 Rs 10.75 50,00,000 300,00,000 250,00,000 Rs 11.71 Rs 29,28,57,143
    15-Oct-19 5-Feb-20 Rs 11.40 1,00,00,000 200,00,000 175,00,000 Rs 13.24 Rs 23,16,66,667
    6-Feb-20 31-Mar-20 Rs 11.73 1,25,00,000 100,00,000 25,00,000 Rs 14.02 Rs 3,50,52,910
    CLOSING INVENTORY: 2,00,00,000 Total COGS Rs 100,95,76,720
    Closing Inventory: Lower of
    Cost or NRV @ 14.02 Rs 28,04,23,280
    LIFO:
    No. of Units Unit Cost Total Cost
    1,00,00,000 Rs 15 Rs 15,00,00,000
    2,00,00,000 Rs 14 Rs 28,00,00,000
    3,00,00,000 Rs 12 Rs 36,00,00,000
    3,00,00,000 Rs 10 Rs 30,00,00,000
    9,00,00,000 Total COGS Rs 109,00,00,000

    Cl. Inventory: Lower of Cost or Net Realisable Value


    2,00,00,000 Rs 20,00,00,000

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