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Why is Abnormal Loss calculated on Actual Cost price ( 1500 in the given solution ) but Closing Stock is calculated on Invoice price ( 2000 in the given solution ) ?

Ardhendu Sekhar Acharya

CMA Inter

★ 250

07-Nov-22 18:48

491

Answers (6)

Best Answer

When inventory is calculated on invoice price we debit inventory reserved so that it would be netted off to cost...so, both inventory and abnormal loss would be in cost

Yamuna S

CA Inter

★ 15K+

07-Nov-22 19:20

Pls share question.

CA Suraj Lakhotia

Admin

07-Nov-22 18:53

Ill 4

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Ardhendu Sekhar Acharya

CMA Inter

★ 250

07-Nov-22 18:54

Question cont..

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Thread Starter

Ardhendu Sekhar Acharya

CMA Inter

★ 250

07-Nov-22 18:55

Yamuna S

When inventory is calculated on invoice price we debit inventory reserved so that it would be netted off to cost...so, both inventory and abnormal loss would be in cost

Thank you I got your point

Thread Starter

Ardhendu Sekhar Acharya

CMA Inter

★ 250

07-Nov-22 19:23

CA Suraj Lakhotia Admin

Pls share question.

Invoice price means a presumed value created by consignor so,while calculating abnormal loss whey will not include presumed value just they include actual loss

G Vishnu Prasad

CA Inter

★ 2K+

07-Nov-22 20:04