Post Reply 
 
Thread Rating:
  • 0 Votes - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Please seniors solve my queries???????
06-16-2007, 04:25 AM
Post: #1
Please seniors solve my queries???????
Please solve this question

Star chemicals ltd imported 500 kg of raw material XR with a price of 1500 US $ per metric ton(1 metric tone =1000kg)company paid import duty of RS 40000 and other import charges RS 12000.The withholding tax applicable is 5% of the purchase price payable at the time of import.Also company had to pay RS 5000 for clearing charges and RS 8000 for transporting goods to their factory.

The raw material is used by the company in a product which is later exported and export rebate of 75% is receivable.
At the end of the year company has consumed three fifth of the stock.
Currency conversion rate is 1 US $=RS 60

Calculate the value of ending inventory.
Visit this user's website Find all posts by this user
Quote this message in a reply
06-16-2007, 08:57 PM
Post: #2
 
consult cost account book by sp janes if ur doing this q for mod d
Visit this user's website Find all posts by this user
Quote this message in a reply
06-17-2007, 08:49 PM
Post: #3
 
Can anyone tell me that in the question that I have asked shall we add withholding tax and subtract rebate on exports while calculating closing inventory?
Visit this user's website Find all posts by this user
Quote this message in a reply
06-19-2007, 04:17 AM
Post: #4
 
Is there anyone genius in this forum who can answer my question????????????????????
Visit this user's website Find all posts by this user
Quote this message in a reply
06-24-2007, 03:51 AM
Post: #5
 
While valuing inventories we should not include payments that are adjustable in future.
Withholding tax is adjustable in future against closing tax liability of the company. So it will not be added to the value of inventory.
Export rebate should be added to revenue and not deducted from inventories.
Visit this user's website Find all posts by this user
Quote this message in a reply
06-24-2007, 05:26 PM
Post: #6
 
Mr Rehman you have written that "Export rebate should be added to revenue and not deducted from inventories",but in IAS it is written that rebates should be deducted from the value of inventories.Please comment on that.Also please can you explain by giving a simple example that how withholding tax is adjusted against closing tax liability of the company?
Visit this user's website Find all posts by this user
Quote this message in a reply
06-25-2007, 09:44 PM
Post: #7
 
Dear Dhoom,

Since I dont find this forum a place to solve these academic questions, I have not so far given my views on the question. Notwithstanding the actual question I have following view

Export rebate is not a rebate in the context of IAS 2 as it is not a reduction towards the price paid on acquiring the stocks. Rather, it is a rebate in respect of certain duties and taxes. Export rebate has to be a part of revenue/sales or Other Operating income as per some selected opinion issued by ICAP. Export rebate is allowed by government and not by supplier. This has to be claimed from Customs department on export sales realization as per rates allowed in the notifications issued in this regard.

Withholding tax/Tax deducted at source is adjustable against income tax liability of a given period. Therefore, when it is withheld or dedcuted, it has to be treated as an asset "ADVANCE INCOME TAX" in the books of account. When income tax return (or some statement under PTR) is filed, the advance tax to the extent of the income tax liability/provision is adjusted against such provision/liability and remaining balance, if any, continues to be treated as advance income tax. This adjustment is more logical when the new income tax ordinance (ITO2001) has made the filing of return, as the assessment of an assesse in a style of self assessment.

Advance tax can also be shown net of provision for taxation in the financial statements.

Best regards,
Visit this user's website Find all posts by this user
Quote this message in a reply
06-26-2007, 07:54 AM
Post: #8
 
Agreed...
nice explanation...
Visit this user's website Find all posts by this user
Quote this message in a reply
06-26-2007, 04:38 PM
Post: #9
 
Dear Mr. Abdur Rehman,

This forum needs ur contribution as well as presence/contribution from Mr. Ali Akbar and such other persons having inquistiveness of acquisition of knowledge.

Regards,
Visit this user's website Find all posts by this user
Quote this message in a reply
06-27-2007, 05:38 PM
Post: #10
 
Thanx Mr Kamran.Now I have understood this problem.
Visit this user's website Find all posts by this user
Quote this message in a reply
06-27-2007, 05:48 PM
Post: #11
 
Dear members

Please try to answer the following question

Accounting period is 30 june 2001 to 31 dec 2001,

In my question following statement is written

"Purchase invoices relating to goods received in dec 2001 but which were entered in the purchase register in 1st week of January 2002 amounted to Rs 291000."

My question is,

What period do these purchases belong to?
1.30 june 2001-31 dec 2001 or
2.next period that is 1st jan 2002
Visit this user's website Find all posts by this user
Quote this message in a reply
06-27-2007, 06:40 PM
Post: #12
 
Dear,

I cannot understand this question. If goods were received in Dec 2001 then why these were entered in purchase register in Jan 2002? Is it some rectification of error sort of question?

If these goods were received in Dec 2001 then we have to look on the terms of purchase. Either these were cash purchases or credit purchases? If these were cash purchases then these should have been accounted for in Dec 2001. You can get the reasoning from IAS-1 and IAS-18 for doing so.

However, if these goods were purchased on credit then we have to base our conclusion on terms of acceptance of goods. Whether the receiving of goods is sufficient to create an obligation against such purchases or such goods have to undergo some inspection, testing and approval procedures afetr which these could either be accepted or rejected. If the later is the case and these procedures were not completed in Dec 2001, then goods could be concluded under the process of approval during Dec 2001. In such case these could be accounted for in Jan 2002 on final approval, the event authorizing the accouning of such transaction. Reliance could be made on the stipulations of IAS-1, IAS-2, IAS-18 and to some extent on IAS-37.

However, if nothing i clarified in question, then it should be concluded as cash purchase and be accounted for in Dec 2001.

Regards,
Visit this user's website Find all posts by this user
Quote this message in a reply
06-27-2007, 11:22 PM
Post: #13
 
Thanx a lot for answering my question.
Visit this user's website Find all posts by this user
Quote this message in a reply
06-28-2007, 11:25 PM
Post: #14
 
I have read in an accounts book wriiten by javed zuberi that

1.If any expenditure incurred in respect of a fixed asset and if this expense is improving the quality of that asset although not increasing the useful life then it should be added in the cost of that asset.

2.If any expenditure incurred in respect of a fixed asset and if this expense is increasing the useful life of an asset then it should be debited in accumulated depreciation account of that asset and not the cost.

Why are there 2 different treatments?Although the new book value which we would get would be same in both the cases.???

MY QUESTION NUMBER TWO IS

Fire occured in the premises of X Ltd on 10 th january,2000. All the stocks were destroyed except to the extent of RS 62,000.From the following figures,ascertain the loss suffered by the company

RS
Stock on 1st April ,1998 360000
Purchases less returns during 1998-99 1450000
Sales less returns during 1998-99 2000000
Stock on 31st March 1999 225000
Purchases less returns since 1st April, 99 up to date of fire 1460000
Sales less returns since April, 1999 up to date of fire 1890000

It was the practice of the firm to value stock at cost less 10%.Early in April 1999; prices were raised by 5%.

My questions are as follows

1. In this question whether sales price has increased or purchase?
2. If we want to find out the rate of Gross Profit of last year then shall we bring the stock to its original cost? If yes then why is this so?

Please write your explanation in detail.
I would be grateful to you.
Visit this user's website Find all posts by this user
Quote this message in a reply
07-06-2007, 11:01 PM
Post: #15
 
I think the questions that I have asked are really very very difficult for all of the senior memebers of this forum to answer.

Any ways,thanx for not helping.
Visit this user's website Find all posts by this user
Quote this message in a reply
Post Reply 


Forum Jump:


User(s) browsing this thread: 1 Guest(s)