02-17-2009, 05:58 PM
Tariq,
You have not mentioned in your sheet that what JV has done with the goods purchased from venturer.
Were such goods included in JV's reported revenue of Rs. 120?
If not then these should make a part of the stock of JV. If this is the case, how you have charged cost of Rs. 50 in total cost of JV. You must appreciate that the cost of inventories (or goods) cannot be charged to P/L account unless these have been sold.
Please explain whether these were included in JV's sales/revenue of Rs 120 or not and if not, were these fully retained in stocks? Please also explain how you can charge cost of goodS/inventories to P/L account unless these have been sold?
The only reason could be that such goods were fixed assets for JV. If this was the case even then whole of their cost could not be charged to P/L account. Rather, it may have to be capitalzied and depreciated.
Please remove these confusions so that I may suggest answer to your query, which appears very simple if these ambiguities are removed.
Regards,
KAMRAN.
You have not mentioned in your sheet that what JV has done with the goods purchased from venturer.
Were such goods included in JV's reported revenue of Rs. 120?
If not then these should make a part of the stock of JV. If this is the case, how you have charged cost of Rs. 50 in total cost of JV. You must appreciate that the cost of inventories (or goods) cannot be charged to P/L account unless these have been sold.
Please explain whether these were included in JV's sales/revenue of Rs 120 or not and if not, were these fully retained in stocks? Please also explain how you can charge cost of goodS/inventories to P/L account unless these have been sold?
The only reason could be that such goods were fixed assets for JV. If this was the case even then whole of their cost could not be charged to P/L account. Rather, it may have to be capitalzied and depreciated.
Please remove these confusions so that I may suggest answer to your query, which appears very simple if these ambiguities are removed.
Regards,
KAMRAN.
