Medicines in case of hospital
Stationery items in the offices
Sports material or equipment in case of club
In short, in a question, in the receipts and payment account
on the payment side following items may be considered
under the category of consumable goods:
Stationery
Foodstuff
Crockery items
Sports equipment on materials
Cricket equipment
Medicine
1. Closing balance/stock of consumable goods
should be there.
2. Amount of consumable goods purchased during
the year is also given.
Note:
Both the conditions should be fulfilled in a question
to apply the formula of cost of consumable goods.
Case (a)
Suppose that, on a morning you had 30 pens at your
home, during the whole day you had purchased 10 more
pens.
Now, can you tell, what is the number of pens which you
had consumed/used on that day?
Answer:
Not possible to calculate.
Case (b)
Suppose that, on the same morning, you had 30 pens at
your home and during the whole day you made purchase of
10 more pens. At the end of the day you found that, only 25
Pence are remaining with you.
Now, can you tell the number of pens consumed or used
during that day?
Answer:
Yes, 15 pens have been consumed during the day,
(30 + 10) - 25
Case (c)
Suppose that, on the same morning, you don't have
any pen but during the whole day you made
purchase of 15 pens and at the end of the day you
found that, only 5 pens are remaining with you.
Now, can you tell, the number of pens consumed or
used during that day?
Answer:
Yes, 10 pens have been consumed during the day,
(15 - 5).
To calculate the amount of cost of consumable goods
the following data should be at least available:
1. Closing stock or balance of consumable goods.
2. Amount of purchases made during the year.
Request 🙏🙏🙏
Extract of Receipts and Payment account
(31.3.2021)
Receipts Amt. Payments Amt
By Stationery 2000
By Sports Equipment 40000
By Crockery Items 6000
Additional information
1. Stock of sports material as on 31st March 2020 and 31st March
2021 amounted to rupees 10000 rupees 35000 respectively.
2. Stock of stationery items at the end of the year amount to rupees
500.
3. Opening stock of crockery items amounted to rupees 10000.
Income and expenditure account
Expenditure Amt Income Amt
To Sports Equipment Consume:
Opening Stock 10000
(+) Purchases 40000
(-) Closing Stock 35000 15000
To Stationery Consumed:
Purchases 2000
(-) Closing Stock 500 1500
Note:
Crockery will be shown in the balance sheet on the asset side as
rupees 16000, (6000 + 10000)
Opening stock ……….
(+) Purchases during the year* ……….
(both cash and credit purchase)
(-) Closing stock* ……….
Objective of preparing Creditors for consumable goods A/C
This account is prepared to calculate the amount of credit
purchases made during the year.
Format of creditors account
Particular Amt. Particular Amt
To balance b/d (Adv) Opening By Balance b/d (Creditors) Opening
To Bank (Amt. Paid) As given By Income / exp. A/C (B/Fig. Difference
being credit purchases)
To Balance c/d (Creditors) Closing By Balance c/d (Adv) Closing
Note
if purchases made during the year is already given in the question
then the balances of creditors will be ignored.
Total purchase = credit purchase + cash purchase
Q.1. From the following information calculate the cost of stationery
consumed during the year 31st March 2021.
31.3.2020 31.3.2021
Stock of stationery 15000 8000
Creditors for stationery 6000 9000
Amount paid for stationery during the year rupees 10800
Alternative 1
Opening Stock 15000
(+) Amount Paid 10800
(-) Closing Stock 8000
17800
(-) Creditors at beginning 6000
(+) Creditors at End 9000
Cost of Stationery Consumed 20800
Alternative 2
Creditors account
Particular Amt. Particular Amt
To Bank (Amt. Paid) 10800 By Balance b/d 6000
To Balance c/d 9000 By Income / exp. A/C (B/Fig. 13800
being credit purchases)
19800 19800
Opening Stock 15000
(+) Purchases 13800
(-) Closing Stock 8000
Cost of Stationery Consumed 20800
Q.2. From the following information calculate the cost of sports
material consumed during the year ended 31st March 2021.
31.3.2020 31.3.2021
Stock of sports materials 45000 60000
Creditors for sports materials 70000 40000
Additional information
1. Amount paid during the year for sports material
amount to rupees 180000.
2. Cash purchase was one third (1/3rd) of credit
purchases.
Creditors account
Particular Amt. Particular Amt
To Bank (Amt. Paid) 180000 By Balance b/d 70000
To Balance c/d 40000 By Income / exp. A/C (B/Fig. 150000
being credit purchases)
220000 220000
Total purchase = credit purchase + cash purchase
= 150000 + 1/3rd of 150000
= 150000 + 50000
= 200000
Opening Stock 45000
(+) Purchases 200000
(-) Closing Stock 60000
Cost of Sports Materials Consumed 185000
