1. PACKAGES AND CONTAINERS

2.  Container or package is anything in which product is packed for sale. It may be a packet, bottle tube drum cylinder jar or any other item. Packet or container may be of two type, viz.. primary or secondary. The former related to those packages which forms type of products. The cost of such containers is included in the cost of the product. The other type related to those containers which are required for distribution of goods to the customers. Such types of containers are usually Returnable to the seller within a stipulated period of time by the buyer.

3. Accounting treatment … to exercise control on movements of containers to ensure that containers are properly returned by customers and due credit is given to them are charged separately. B…. To see that there is no misappropriation of containers. B…. To see that there is no misappropriation of containers. C…. To find out profit or loss on containers separately from the main product when a separate charge is made for containers. C…. To find out profit or loss on containers separately from the main product when a separate charge is made for containers. The accounting treatments of containers will be depend upon the policy of the individual concern. Accounting for packages or containers is done to achieve the following objectives Accounting for packages or containers is done to achieve the following objectives

4. Containers non- returnable

5. When a separate charge is not made 1 When a separate charge is not made The charge for the containers in this case will be included in the sale price of the goods. A containers stock account should be kept which will be debited with opening stock of containers and purchases and credited with closing stock, the balance being the expenses of containers during the period of the accounts is written off as distribution expense to the profit and loss account The charge for the containers in this case will be included in the sale price of the goods. A containers stock account should be kept which will be debited with opening stock of containers and purchases and credited with closing stock, the balance being the expenses of containers during the period of the accounts is written off as distribution expense to the profit and loss account

6. CONTAINERS STOCK ACCOUNT (when containers are not returnable and no separate charge is made)

7. ParticularsAmountParticularsAmount To balance b/dBy bank To purchasesBy profit & loss a/c By trading manufacturing a/c By balance c/d (closing stock of containers at cost)

8. Prepare containers stock accounts from information opening stock – 20000 purchases – 190000 sale of containers scrapped - 5000 cost of container lost due to fire -6000 containers in hard - 25000

9. ParticularAmountsParticularAmounts To balance b/d20000By bank5000 To purchases190000By profit & loss a/c 6000 By trading manufacturing a/c 174000 By balancing25000 210000

10. When separate charge is made When separate charge is made – The charge for the containers in this case will be included in the sale price of the goods. A containers stock account should be kept which will be debited with opening stock of containers and purchases and credited with closing stock, the balance being the expenses of containers during the period of the accounts is written off as distribution expense to the profit and loss account The charge for the containers in this case will be included in the sale price of the goods. A containers stock account should be kept which will be debited with opening stock of containers and purchases and credited with closing stock, the balance being the expenses of containers during the period of the accounts is written off as distribution expense to the profit and loss account

11. CONTAINERS STOCK ACCOUNT (when containers are not returnable and separate charge is made)

12. ParticularsAmountParticularsAmount To balance b/dBy bank To purchasesBy profit & loss a/c To profit & loss a/cBy customer a/c (charge at containers more than cost ) By balance c/d closing stock of containers at cost)

13. QUESTION -Prepare containers stock accounts from information opening stock – 55000 purchases – 320000 sale of containers scrapped -12000 cost of container lost due to fire - 10000 containers in hard – 60000 charged on customer -315000

14. Prepare containers stock accounts from information opening stock – 55000 purchases – 320000 sale of containers scrapped -12000 cost of container lost due to fire -10000 containers in hard – 60000 charged on customer -315000 ParticularAmountsParticularAmounts To balance b/d55000By bank12000 To purchases320000By profit & loss a/c10000 To profit & loss22000By customers a/c315000 By balancing60000 397000

15. Containers returnable

16. When a separate charge is not made The double entry book keeping will be similar to that Except that opening and closing stock will be divided between containers in the warehouse and those in the hand of the customers stock must be brought into the accounts in cost less adequate depreciation

17. Following journal entries are passed

18. ParticularAmounts amounts 1 for purchase of containers by the firm Containers stock accounts Dr To cash account 2When goods are sold in containers customers account Dr To sales accounts 3When goods are returned sales return accounts Dr To customers account 4When containers are repaired Containers stock accounts Dr To cash account 5container lost due to fire profit and loss account Dr To Containers stock accounts 6Depreciation on containers profit and loss account Dr To Containers stock accounts

19. When a separate charge is made Container or package is anything in which product is packed for sale. It may be a packet, bottle tube drum cylinder jar or any other item. Packet or container may be of two type, viz.. primary or secondary. The former related to those packages which forms type of products. The cost of such containers is included in the cost of the product. The other type related to those containers which are required for distribution of goods to the customers. Such types of containers are usually Returnable to the seller within a stipulated period of time by the buyer. Container or package is anything in which product is packed for sale. It may be a packet, bottle tube drum cylinder jar or any other item. Packet or container may be of two type, viz.. primary or secondary. The former related to those packages which forms type of products. The cost of such containers is included in the cost of the product. The other type related to those containers which are required for distribution of goods to the customers. Such types of containers are usually Returnable to the seller within a stipulated period of time by the buyer.

20. Following journal entries are passed

21. ParticularAmounts amounts 1 for purchase of containers by the firm Containers trading accounts Dr To cash account 2When goods are sold in containers customers account Dr To containers trading accounts 3When goods are returned sales return accounts Dr To customers account 4When containers are repaired Containers trading accounts Dr To cash account 5container lost due to fire profit and loss account Dr To Containers trading accounts 6Depreciation on containers profit and loss account Dr To Containers trading accounts

22. THANK YOU