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| Corporate Practice bd |
Closing Stock of Waste Cotton in Balance Sheet Items
Closing Stock of Waste Cotton refers to the value of the waste or by-product cotton that remains unsold or unused at the end of an accounting period. Although waste cotton is typically considered less valuable than raw cotton, it still holds economic value and must be reported on the balance sheet under the inventory section.
Accounting for Closing Stock of Waste Cotton
Closing Stock of Waste Cotton
Amount
Opening Stock of Waste cotton ****
Add: Purchase (Cotton Wise) ****
Less: Issue (SR) (WIP) (****)
Closing Stock of raw cotton ****
Waste cotton Purchase -Journal Entry)
Debit Credit
(Dropping -01, Flat strip) ****
Transit W/C-AB Enterprise *****
Narration:
Amount payable to ZY Enterprise against purchase of Comber Noil-W05564 (44500.000000KG) @160.000000; MRR No: ARML-MRR-24-00545, MRR Date: 21/01/2024, SPR No: ARML-SPR-23- 00552, SPR Date: 14-05-2023. Bill No.82 dt.21.01.24.
Waste cotton Issue Journal Entry:
Debit Credit
Work in Process (WIP) ****
(Comber Noil, Dropping -01, Flat strip) *****
Narration:
prd(Noil). Production department received Comber Noil (3420.000000Kg) Issue No: ARML-ISS (WC) - 24-0127, Issue Date: 22/01/2024.
(For waste cotton party provision Journal):
Debit Credit
Transit W/C-ABC Enterprise ****
XYZ Enterprise S.C ****
AB Enterprise AIT Deduction *****
Narration:
Amount payable for 5600 kgs flat strip purchase @Tk.78.00 per kg.Bill no.2250dt.12.01.21.MRRno.14414dt.23.01.21.Total bll=64665463
Bank Payment Voucher (For waste cotton Party payment):
Debit Credit
AB Enterprise S.C ******
Social Islamic Bank Ltd. SND- 3850 *****
Narration:
Paid Vide Chq No.564123 dt.10.01.24 Bill no.665 dt.21.12.23 for purchase of Flat Strip 47552, Kgs @Tk.124.00 & Bag 2600 Pcs @ Tk.16.00 MRRNo.55 Partial Payment.
Conclusion:
The closing stock of waste cotton is an important part of a company’s inventory that needs to be accurately valued and reported on the balance sheet. Proper management and accounting of waste cotton ensure accurate financial reporting, effective resource management, and potential revenue generation. By recognizing and valuing waste cotton, a company can improve its financial health and support sustainability initiatives.