ICI Ltd produced soda ash. That product uses in differentindustries. The property of this product is highly inflammable. Theposition of university at the beginning of year 2007 is as follows.
Inventories at Jan 1, 2007 consisted of:
|
Particulars Rs
|
Rs.
|
|
Finished
|
8,000
|
|
Work-In-Process
|
6,000
|
|
Material
|
1,200
|
|
Total
|
15,200
|
A fire broke out in a factory at July 31, 2007 destroying allwork-in -process inventories.
After the fire, the inventories were valued as follows:
|
Particulars Rs
|
Rs.
|
|
Material
|
4,000
|
|
Finished Goods
|
7,000
|
In 2007 the amount of Gross profit is based on average GP tosale ratio of last 5 years 2002 to onward 2006. An analysis of past financial statements reflected as follows.
|
Year
|
Sale
|
Gross Profit
|
|
Rs.
|
Rs.
|
|
2002
|
40,000
|
11,555
|
|
2003
|
45,000
|
11,132
|
|
2004
|
50,000
|
13,452
|
|
2005
|
52,000
|
12,897
|
|
2006
|
60,000
|
17,654
|
Date for 7 months to 2007 is given as follows:
|
Particulars
|
Rs.
|
|
Sales
|
20,000
|
|
Material Purchase
|
56,00
|
|
Direct labor
|
6,000
|
|
FOH
|
3,000
|
Required: Calculate the value of work-in-process destroyed by fire in2007. Calculate the value Gross profit in 2007.