A manufacturing firm, Bravo Enterprises DID NOT exist at 01-07-2019. The record shows that the firm started its business as at 30-09-2019 and after commencement of the business total purchases of Rs. 3,000,000 were made by the firm till end of the Tax Year 2020.

Further record reveals the following information:

1. A stock was purchased at 31-03-2019. This stock has different values as follows:

• Purchase price of Rs. 700,000
• Fair Market Value at the time of purchase of Rs. 800,000
• Fair Market Value at the time of usage for business purpose as at 10-01-2020 of Rs. 900,000
• Fair Market Value as at 01-07-2019 of Rs. 800,000

2. A closing stock of 60,000 units was in hand as at 30-06-2020. Following information was related to these units of closing stock:

1. Following costs were incurred at these units:

• Total Material cost of Rs. 700,000
• Total Labor cost of Rs. 100,000
• Other factory overheads of Rs. 200,000

2. Estimated Selling price of these units is Rs. 1500,000
3. An additional cost of Rs. 400,000 is required for the completion of these units
4. Estimated selling expenses of Rs. 50,000 would also be required for the sale of these units

 

REQUIRED:

You have to calculate the followings for Tax Year 2020:

1. Value of opening stock-in-trade                                                                                        (05)
2. Value of stock consumed during the year                                                                        (05)
3. Value of closing stock-in-trade. The firm is using absorption cost method.                     (05)

Answer rating: 100% (QA)

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