PACKAGES AND CONTAINERS Introduction Container or package is

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PACKAGES AND CONTAINERS

PACKAGES AND CONTAINERS

Introduction Container or package is anything in which product is packed for sale. It

Introduction Container or package is anything in which product is packed for sale. It may be a packet, bottle tube drum cylinder jar or any other item. Packet or container may be of two type , viz. . primary or secondary. The former related to those packages which forms type of products. The cost of such containers is included in the cost of the product. The other type related to those containers which are required for distribution of goods to the customers. Such types of containers are usually Returnable to the seller within a stipulated period of time by the buyer.

Accounting treatment … to exercise control on movements of containers to ensure that containers

Accounting treatment … to exercise control on movements of containers to ensure that containers are properly returned by customers and due credit is given to them are charged separately. B…. To see that there is no misappropriation of containers. C…. To find out profit or loss on containers separately from the main product when a separate charge is made for containers. The accounting treatments of containers will be depend upon the policy of the individual concern. Accounting for packages or containers is done to achieve the following objectives

Containers non-returnable

Containers non-returnable

When a separate charge is not made 1 When a separate charge is not

When a separate charge is not made 1 When a separate charge is not made The charge for the containers in this case will be included in the sale price of the goods. A containers stock account should be kept which will be debited with opening stock of containers and purchases and credited with closing stock, the balance being the expenses of containers during the period of the accounts is written off as distribution expense to the profit and loss account

CONTAINERS STOCK ACCOUNT (when containers are not returnable and no separate charge is made)

CONTAINERS STOCK ACCOUNT (when containers are not returnable and no separate charge is made)

CONTAINERS STOCK ACCOUNT (when containers are not returnable and no separate charge is made)

CONTAINERS STOCK ACCOUNT (when containers are not returnable and no separate charge is made) Particulars Amount Particulars To balance b/d By bank To purchases By profit & loss a/c By trading manufacturing a/c By balance c/d (closing stock of containers at cost) Amount

Prepare containers stock accounts from information opening stock – 20000 purchases – 190000 sale

Prepare containers stock accounts from information opening stock – 20000 purchases – 190000 sale of containers scrapped -5000 cost of container lost due to fire -6000 containers in hard - 25000

Prepare containers stock accounts from information opening stock – 20000 purchases – 190000 sale

Prepare containers stock accounts from information opening stock – 20000 purchases – 190000 sale of containers scrapped -5000 cost of container lost due to fire -6000 containers in hard - 25000 Particular Amounts To balance b/d 20000 By bank 5000 To purchases 190000 By profit & loss a/c 6000 By trading 174000 manufacturing a/c By balancing 210000 25000 210000

When separate charge is made – The charge for the containers in this case

When separate charge is made – The charge for the containers in this case will be included in the sale price of the goods. A containers stock account should be kept which will be debited with opening stock of containers and purchases and credited with closing stock, the balance being the expenses of containers during the period of the accounts is written off as distribution expense to the profit and loss account

 CONTAINERS STOCK ACCOUNT (when containers are not returnable and separate charge is made)

CONTAINERS STOCK ACCOUNT (when containers are not returnable and separate charge is made)

CONTAINERS STOCK ACCOUNT (when containers are not returnable and separate charge is made) Particulars

CONTAINERS STOCK ACCOUNT (when containers are not returnable and separate charge is made) Particulars Amount Particulars To balance b/d By bank To purchases By profit & loss a/c To profit & loss a/c By customer a/c (charge at containers more than cost ) By balance c/d closing stock of containers at cost) Amount

QUESTION -Prepare containers stock accounts from information opening stock – 55000 purchases – 320000

QUESTION -Prepare containers stock accounts from information opening stock – 55000 purchases – 320000 sale of containers scrapped -12000 cost of container lost due to fire -10000 containers in hard – 60000 charged on customer -315000

Prepare containers stock accounts from information opening stock – 55000 purchases – 320000 sale

Prepare containers stock accounts from information opening stock – 55000 purchases – 320000 sale of containers scrapped -12000 cost of container lost due to fire -10000 containers in hard – 60000 charged on customer -315000 Particular Amounts To balance b/d 55000 By bank 12000 To purchases 320000 By profit & loss a/c 10000 To profit & loss 22000 By customers a/c 315000 By balancing 60000 397000

Containers returnable

Containers returnable

When a separate charge is not made • The double entry book keeping will

When a separate charge is not made • The double entry book keeping will be similar to that • Except that opening and closing stock will be divided between containers in the warehouse and those in the hand of the customers stock must be brought into the accounts in cost less adequate depreciation

 • Following journal entries are passed

• Following journal entries are passed

Particular Amounts 1 for purchase of containers by the firm Containers stock accounts To

Particular Amounts 1 for purchase of containers by the firm Containers stock accounts To cash account Dr 2 When goods are sold in containers customers account To sales accounts Dr 3 When goods are returned sales return accounts To customers account Dr 4 When containers are repaired stock accounts To cash account Dr Containers 5 container lost due to fire profit and loss account To Containers stock accounts Dr 6 Depreciation on containers profit and loss account To Containers stock accounts Dr amounts

When a separate charge is made • Container or package is anything in which

When a separate charge is made • Container or package is anything in which product is packed for sale. It may be a packet, bottle tube drum cylinder jar or any other item. Packet or container may be of two type , viz. . primary or secondary. The former related to those packages which forms type of products. The cost of such containers is included in the cost of the product. The other type related to those containers which are required for distribution of goods to the customers. Such types of containers are usually Returnable to the seller within a stipulated period of time by the buyer.

 • Following journal entries are passed

• Following journal entries are passed

Particular Amounts 1 for purchase of containers by the firm Containers trading accounts To

Particular Amounts 1 for purchase of containers by the firm Containers trading accounts To cash account 2 Dr When goods are sold in containers customers account To containers trading accounts 3 When goods are returned sales return accounts To customers account 4 When containers are repaired trading accounts To cash account Dr Dr Dr Containers 5 container lost due to fire profit and loss account To Containers trading accounts Dr 6 Depreciation on containers profit and loss account Dr To Containers trading accounts amounts

THANK YOU

THANK YOU