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Q. > Please Help: inventory
whether the rent of godown in which inventory is stored is required to be add in cost of inventory?
answered Nov 18, 2011 by AKHIL MAHESHWARI , Bhilwara
Dear Saurabh Kapoor, Rent of the godown is an indirect expense in fact the inventory is stored in godown and so is debited to profit & loss account rather adding to the cost of inventory as rent is paid in aggregate for whole godown collectively and not separately for each type of stock/ inventory. Hence, it will be charged from P&L Account.......
answered Nov 18, 2011 by CA VIPIN GARG , New Delhi
Dear Saurabh, Rent will never going to add in the inventory cost as it will be shown in the profit and loss account seperately, hope you got the answer you were looking, have a nice day dear.........
answered Nov 18, 2011 by AKHIL MAHESHWARI , Bhilwara
The ultimate conclusion is Rent of godown is indirect expenses and so will be debited to Profit and Loss Account with blind eyes....
Experts Panelist
Comments
shivashish karnani
21-Nov-2011 , 05:02:44 pmAccording to me, Rent is an indirect expense and the expense will be debited to P&L a/c,. But this is not the end solution, because we will consider rent (if it will be incurred in future)in costing so as to find the actual cost and get the reqd returns by selling the inventories.
prashanthboorugu
14-Dec-2011 , 03:20:04 pmagreed with the above...