DR CONTAINER TRADING ACCOUNT CR
| DETAILS | QTY | RATE | AMOUNT | DETAILS | QTY | RATE | AMOUNT |
| Returned | xx | CR back price | xxx | opening deposit return | x | credit back price | xxx |
| Retained | xx | valuation | xxx | charged to customer | xxx | charge out .pr | xxx |
| Scrapped | x | valuation | xx | sale of container | |||
| Depreciation | xx | scrapped | x | Valuation | xx | ||
| Repairs | xx | ||||||
| Profit | x | ||||||
| credit | |||||||
| closing deposit | xx | back price | xxx | ||||
| xxxx | xxxx |
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DR CONTAINER DEBTORS CR
| DETAILS | QTY | RATE | AMOUNT | DETAILS | QTY | RATE | AMOUNT |
| 1/1 Bal.b/d | x | xxx | Returned | CR back | xx | ||
| Receipt | xx | ||||||
| Trading to customer | xxx | Charge out price | xxx | Retained | xx | – | |
| 31/12 Bal.c/d | xx | xxx | |||||
| xxx | xxxx | xxx | xxxx | ||||
| Balance b/d | xx | xxxx |
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EXERCISE
Pankraparcrimparcat co ltd sells oil in drums which are charged at Tshs 10 each. Customers returning drums within a month are credited with Tshs 7.
The following information is available from the books:
- Drums returnable on 1.1.999 4000
- Drums in stock as on 1.1.999 8000
- Drums purchased in 1999 at Tshs 5 each 30000
- Drums sent out in 1999 500000
- Drums returnable by customers 480,000
- Drums scrapped in 1999 (sold for 6000) 2000
- Drums sent out in Dec 1999 lying with customers 10000
- All drums at 31st Dec 1999 are to be valued at 50% of the cost price
- All drums as on 1.1.1999 were valued at Tshs 2/50 each
- Amount received from drum debtors as on 1.1.1999 was Tshs 1580000
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Required:-
- Prepare the drums trading account and drums debtors A/c
- Prepare a statement of profit of loss on drums for the year ended 31st December 1999.
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DR DRUMS STOCK ACCOUNT CR
| DETAILS | QTY | RATE | AMOUNT | DETAILS | QTY | RATE | AMOUNT |
| Bal.b/d -premises | 8000 | 2.5 | 20,000 | Drums Trading scrapped | 2000 | 2.5 | 5000 |
| with customers | 4000 | 2.5 | 10,000 | Retained | 14,000 | – | 45,000 |
| cash;purchases | 30000 | 5 | 150,000 | Depreciation | 65,000 | ||
| Bal,c/d – premises | 16,000 | 2.5 | 40,000 | ||||
| – customer | 10,000 | 2.5 | 25,000 | ||||
| 42,000 | 180,000 | 42,000 | 180,000 | ||||
| Balance b/d premises | 16,000 | 2.5 | 40,000 | ||||
| customer | 10,000 | 2.5 | 25,000 |
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DR DRUMS DEBTORS ACCOUNT CR
| DETAILS | QTY | RATE | AMOUNT | DETAILS | QTY | RATE | AMOUNT |
| Drum D Returned | 480,000 | 7 | 3,336,000 | Bal.c/d | 4,000 | 7 | 28,000 |
| Drum stock scrapped | 2000 | 2.5 | 5000 | Drum debtor sent | 500,000 | 10 | 5,000,000 |
| Retained | 14,000 | 45,000 | cash sale of scrapped | 2000 | 6000 | ||
| Depreciation | 65,000 | ||||||
| Profit | 1,489,000 | ||||||
| 31/12 Bal.c/d | 10,000 | 7 | 70,000 | ||||
| 506,000 | 5,034,000 | 506,000 | 5,034,000 | ||||
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FIFO method is used:
Valuation drum retained = 10000 @2.50 = 25000
4000@5 = 20000
45000
Statement to profit or loss
Hiring charge = (10 – 7) 500000 1500000
Add: profit on co. Retained = (7-2.50) 14000 63000
1563000
Deduct: depreciation = (5 -2.50) 30000 7500
Loss on sales = 6000 – (2.50 x 2000) 1000
Profit 1487000
EXERCISE
Madras chemicals ltd supply their products in returnable drums which are charged out at Tshs 20 each. Customers returning the drums within a month are credited with Tshs 18. The company’s procedure is to retain Tshs 18 in deposit account till the expiry of the option period for return of the drums.
The following particulars are available from the drums:-
Numbers
Returnable drums are as on 1.1.1991 8000
Drums in stock as on 1.1.1991 16000
Drums purchased during 1991 at shs 15 per drum 20000
Drums sent to customers during 1991 300000
Drums returned by customers in 1991 288000
Drums returnable on 31.12.1991 15000
Drums scrapped in 1991 sold for Tshs 10000 2000
All drums as on 31.12.90 and 31.12.91 are to be valued at Tshs 10 each. All the amounts due in respect of drums had been collected from the customers
You are asked to show the ledger a/c for 1991 for:-
- Drums stock.
- Drums debtors
- Drums trading a/c
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DR DRUMS STOCK ACCOUNT CR
| DETAILS | QTY | RATE | AMOUNT | DETAILS | QTY | RATE | AMOUNT |
| Balance b/d -premises | 16,000 | 10 | 160,000 | scrapped | 2,000 | 10 | 20,000 |
| with customer | 8000 | 10 | 80,000 | Retained | 5000 | 10 | 50,000 |
| purchases | 20,000 | 15 | 300,000 | Depreciation | 100,000 | ||
| Balance c/d – premises | 22,000 | 10 | 220,000 | ||||
| customer | 15,000 | 10 | 150,000 | ||||
| 44,000 | 540,000 | 44,000 | 540,000 | ||||
| balance b/d -premises | 22,000 | 10 | 220,000 | ||||
| with customers | 15,000 | 10 | 150,000 |
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DR DRUMS TRADING ACCOUNT CR
| QTY | RATE | AMOUNT | QTY | RATE | AMOUNT | ||
| Returned | 288,000 | 18 | 5,184,000 | Balance b/d | 8,000 | 18 | 144,000 |
| Scrapped drum stock | 2000 | 10 | 20,000 | Drum debtor sent | 300,000 | 20 | 6,000,000 |
| Retained | 5000 | 10 | 50,000 | sale on scrapped | 2000 | 10,000 | |
| Depreciation | 100,000 | ||||||
| profit | 530,000 | ||||||
| Balance c/d | 15,000 | 18 | 270,000 | ||||
| 310,000 | 6,154,000 | 310,000 | 6,154,000 |
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DR DRUMS DEBTORS ACCOUNT CR
| DETAILS | QTY | RATE | AMOUNT | DETAILS | QTY | RATE | AMOUNT |
| Balance b/d | 8,000 | 80,000 | Returned | 288,000 | 18 | 5,184,000 | |
| Drum Tr | Retained | 5000 | |||||
| Drum Trading sent | 300,000 | 20 | 6,000,000 | ||||
| Balance c/d | 15,000 | 896,000 | |||||
| 308,000 | 6,080,000 | 308,000 | 6,080,000 | ||||
| Balance b/d | 15,000 | 896,000 |
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Statement on profit:
Hiring charge = (20 – 18) 300000 600000
Add: purchase on retained = (18 – 10) 5000
40,000
640,000
Less: depreciation (15 – 10) 2000 100,000
Loss on sales = 10000 – (10 x 2000) 10,000
Profit 530,000
