Ici ltd produced soda ash that product uses in

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Reference no: EM13615894

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.

Reference no: EM13615894

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