Question

From the following information for the year ended 31st March, 2018, prepare notes to accounts to determine the amount to be shown in Statement of Profit and Loss against 'Change in Inventory':

$\begin{array}{ccc}& \text{Opening Inventory}& \text{Closing Inventory}\\ & \text{Rs}& \text{Rs}\\ \text{Finished Goods}& 10,00,000& 9,40,000\\ \text{Work-in-Progress (Semi-Finished Goods)}& 5,00,000& 6,00,000\\ \text{Stock-in Trade}& 8,00,000& 7,30,000\\ \text{Materials}& 1,00,000& 1,50,000\end{array}$

Answer 1

Notes to Accounts

$\begin{array}{ccc}\text{Particulars}& & \text{year ended}\\ & & \mathrm{31.3.2018}\\ \text{Changes in Inventories of Finished Goods, Work-in-Progress and}& \text{Rs}& \text{Rs}\\ \text{Stock-in Trade}:& & \\ \text{(a) Opening Inventory of Finished Goods}& 10,00,000& \\ \text{Less: Closing Inventory of Finished Goods}& \underset{–}{9,40,000}& 60,000\\ \text{(b) Opening Inventory of Work-in-Progress (W.I.P.)}& 5,00,000& \\ \text{Less: Closing Inventory of Work-in-Progress}& \underset{–}{6,00,000}& (1,00,000)\\ \text{(c) Opening Inventory of Stock-in-Trade}& 8,00,000& \\ \text{Less: Closing Inventory of Stock-in-Trade}& \underset{–}{7,30,000}& \underset{–}{70,000}\\ \text{Total (a+b+c)}& & \underset{–}{30,000}\end{array}$

Rs. 30,000 will be shown in the Statement of Profit and Loss against Change in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade.

Note: Difference in the opening and closing inventories of materials is not shown against change in inventories because it is considered while computing cost of materials consumed.