Q & A: Sale of goods manufactured during trial run production
P.D.RUNGTA
Dear All
A company is under the construction phase of its project. It has
manufactured some finished products during the trial run production
and also sold these goods although is yet to commence commercial
production. As per AS 10, the expenses incurred on trial run
production (test runs and experimental production) is usually
capitalized as an indirect element of the construction cost. In the
present case, the goods manufactured during trial run production have
been sold to a third party.
Query:
What would be the accounting treatment of such sales of goods
manufactured during trial run production?
Would appreciate an early response
Vikram Dhanania
Reply:1
The construction cost would be reduced by the amount of sales realization.
Regards,
Ashok Soni
Reply:2
Realisation would be treated in the same as an expense would be treated
during the trial run production.
Regards,
Amit
--
Best Regards,
Pramod Dayal Rungta
M.Com.,LL.B.,AICWA.,DISA(ICAI).,FCA
Member EIRC ICAI (2010-12)
P.D.Rungta & Co.
Chartered Accountants
Board : +91 33 3028 2500 / 1
Direct Line : +91 33 3028 2502/3
Cell : +91 98310 07253
email: pdru...@gmail.com
Head Office:
21, Hement Basu Sarani, 3rd Floor , Room .No.317
Kolkata-700 001,West Bengal, India
Branches :
Bhagalpur | Raipur | Khatima | Godda
Homepage : http://www.pdrungta.co.in/
“Save Paper! Save Trees! Before printing, Think about the environment”
A Candle loses nothing by lighting another candle" --- eServe
DISCLAIMER NOTICE: The information in this email and attachments is
confidential, proprietary to sender and is intended solely for the use of
the individual to whom it is addressed. It may contain privileged or
confidential information and should not be circulated or used for any
purpose other than for what it is intended. If you have received this
message in error, please notify the originator immediately. If you are not
the intended recipient, you are notified that you are strictly prohibited
from using, copying, saving, altering or disclosing the contents of this
message.
WARNING: Computer viruses can be transmitted via email. sender has taken
every reasonable effort to minimize this risk but the recipient should check
this email and any attachments for the presence of viruses. sender accepts
no liability for any damage caused by any virus transmitted by this email.
P.D.RUNGTA
Dear All
A company is under the construction phase of its project. It has
manufactured some finished products during the trial run production
and also sold these goods although is yet to commence commercial
production. As per AS 10, the expenses incurred on trial run
production (test runs and experimental production) is usually
capitalized as an indirect element of the construction cost. In the
present case, the goods manufactured during trial run production have
been sold to a third party.
Query:
What would be the accounting treatment of such sales of goods
manufactured during trial run production?
Would appreciate an early response
Vikram Dhanania
NEW REPLY:1
The preoperative Expenses will be increased by that amount
i.e. (Expenses incurred during the trial period ) and sales
realisation during that period will be reduced from the pre-op
expenses. Sales realisation will not be reflected in the profit &
loss account but will be disclosed by way of notes.
Regards
Kamal Chopra
Singhi & Co.
NEW REPLY:2
Dear Mr. Dhanania,The sale proceeds of the goods manufactured during
trial run will be credited to trial run expenses. It will be
shown as deduction from the pre-operative expenses. Besides, any
unsold stock out of trial production will have the similar
treatment i.e. will be credited to trial run expenses and shown as
deduction from the pre-operative expenses, pending allocation.
Best regardsRaj Bagri
AJAY PARAKH
Haven't heard from anyone on the querry raised.
Appreciate a quick answer to the querry.
Regards
Ajay
From: avpa...@hotmail.com
To: foru...@googlegroups.com
Subject: RE: Declaring Dividend by Private Liimted company to a Foreign Company
Date: Thu, 3 Feb 2011 09:48:03 +0000
From: avpa...@hotmail.com
To: foru...@googlegroups.com
Subject: RE: [PDRUNGTA] Q & A: Sale of goods manufactured during trial run production
Date: Thu, 3 Feb 2011 09:45:00 +0000
Dear All,
Query: There is a Private limted company. The parent company is a foreign company and there is some local shareholding. The private limited company now wants to declare Dividend.
What are the Tax provision with respect to India that needs to considered and complied with?
Is there going to be any Dividend Tax?
Is there going to be any Withholding tax on Dividend? If so at what % age.
Is there going to be any Capital gain tax?
In case the parent company is a BVI company then are provision applicable and in case the parent company is Mauratius based then does it make any difference.
Regards
Ajay
> Date: Wed, 2 Feb 2011 20:04:49 +0530
> Subject: [PDRUNGTA] Q & A: Sale of goods manufactured during trial run production
> From: pdru...@gmail.com
> To: foru...@googlegroups.com
> forum4ca is a Google Group of eServe online for the benefit of CA and other professionals. It is especially meant for written discussion & circulate information within group members. The mail may contain such research/advice/opinion/information/fact provided by any member and are subject to the accuracy and of the description of facts.The forum4ca, do not claim that contains in mail/information obtained after reading as a complete and accurate disclosure of relevant facts. Further this Group’s Owner/Moderator/Member are not liable for any damages or costs suffered due to action/transaction based on information on this Group.
>
> To join and/or to post to this group send email: foru...@googlegroups.com
> To unsubscribe from this group, send email to:forum4ca+u...@googlegroups.com
> For more options, visit this group at:http://groups.google.co.in/group/forum4ca or www.eserveonline.net