Container Accounts

A businessman usually sells his goods in certain container or packages. He

charges for these container or packages besides charging for the price of the
goods. For the accounting purpose container accounts may be defined in to
two types.

Container Accounts

Returnable Non Returnable

Non Returnable Container

In such a case container stock account is open in the books it is debited with
opening stock of container and purchase of container during the period. It is credit
with amount charge to customers to container sent to them and closing stock of
container.

Returnable Container

In such a case the following point are worth,

1. The firm makes an extra charge for the container send to the customer
beside the usually selling price of goods.
2. Customers are given a time limit within which they have to return containers
if they show desire.
3. The price at which the containers are taken back is lower than the price at
which the customers are charge for them. This is a sort of hire or desperation
for the container use.
The following accounts may be opened in the books for accounts of container

1 Container Stock Account

This account debited with the opening stock

of the container and the purchases of container made in during period. It is credited
with the value of containers scrapped, retained by the customers and containers in
stock both with the customers and the firm. The different of the two sides of the
account represent the description of the container which is transferred to the
Container Trading Account.

2 Container Trading Account

This account reveals the profit or loss made

by the firm on the container received and issued. It is credited with the value of the
containers issued to the customers and with the amount of reserve which may be
required for container with the customers in the beginning of the year. In respect of
which the Return period had not expired. It is debited with the value of container
returned, value of the container retained, value of container scrapped and the
reserve that may required in respect of container still with the customer at the end
of the period in respect on which the return period has not yet expired. The
difference of the two sides of this account represents the profit or loss made on the
containers during a particular period.

3 Container Debtors

This account is debited with the money due by the

Debtors in the beginning of the period and the value of the container sent. It is
credited by the value of container return by them and the money sent by them.

4 Container reserve / suspense account

This account is kept simply to

keep a reserve in respect of those containers which are still lying with the
customers and in respect of which are the return period has not expired.
Eg: - L Ltd sells oil in drums which are charged at 10/= each. Customers returning
drums within a month are credited with 8/=. The following information available
from the books of L Ltd.

Returnable drums as at 01.01.2013 4,000

Drums physically in stock as at 01.01.2013 8,000

Drums purchased in 2013 at 5/= each 30,000

Drums sent out in 2013 500,000

Drums returned by customers in 2013 480,000

Drums scrapped in 2013 (sold for 5,000) 2,000

Drums sent out in December 20013 lying with customers 10,000

All drums as at 01.01.2013 were valued at Rs 2 each

All drums as at 31.12.2013 are to be valued at 50% below cost price

Amount due from debtors as at 01.01.2013 10,000

Amount received from debtors during the year 1,100,000

Write up above transaction in the book shop L Ltd

 Drums Stock Account

Amou Amou
Qty Rate nt Qty Rate nt
Balance
B/D
D. Trading
Debtors 4,000 2 8,000 Acc 2,000 2 4,000

16,00 D. Trading 40,00

Stock 8,000 2 0 Acc 14,000 0

150,0 D. Trading 65,00

Purchase 30,000 5 00 Acc 0

Balance C/D

25,00
Debtors 10,000 2.5 0

40,00
Stock 16,000 2.5 0

174,0 174,0
42,000 00 42,000 00

Drums Trade Account

Qty Amount Qty Amount

480,00 3,840,00 Drums Debtor 5,000,0

Drum Debtors 0 0 Acc 50,000 00
Sales of
D. Stock Scrapped 2,000 4,000 scrapped 2,000 5,000

D. Reserve 10,000 80,000 Drums Reserve 4,000 32,000

D. Stock 14,000 40,000

D. Stock
Depreciation 65,000

1,008,00
0
 506,00 5,037,00 506,00 5,037,0
0 0 0 00

Drums Debtors Account

Qty Amount Qty Amount

Drums Trading 480,0 3,840,0

Balance B/D 4,000 10,000 Account 00 00

Drums Trading 500,00 5,000,00 1,100,0

Account 0 0 Cash 00

14,00
Retain 0

10,00
Stock 0 70,000

504,00 5,010,00 504,0 5,010,0

0 0 00 00

Drums Reserve Account

Qty Amount Qty Amount

Drums Trading
Account 4,000 32,000 Balance B/D 4,000 32,000

Drums Trading 10,00

Balance C/F 10,000 80,000 Account 0 80,000

504,00 5,010,0 504,0 5,010,0

0 00 00 00
Balance B/D
10,00 80,000
 0

Eg:- A manufacture sells his goods to customers in containers. The following

information is given in respect of the year 2012/2013.

Purchased during the year 60,000, Container sent out to customers 50,000,
Container fully destroyed 200 containers, sold as scrapped (Rs. 1000) 400
containers.

Stock as at stores 01.04.2012 12,000 containers.

Stock with customers on 31.013.2013Returnable 10,000 containers return from

customers 4,000 containers. Stock with customers on 01.04.2012 Returnable
6,000 containers.

Debtors due on 01.04.2012 50,000

Purchases during the year amount to 600,000. Hire charges is Rs 4 per container.
Chargeable price is 80% above cost. Cost price of the container was constant over
the last 3 years

You are require to prepare Container Stock account, Container Trading account,
Container suspense account and container debtors account

Drums Stock Account

Qty Rate Amount Qty Rate Amount

Balance
 B/D

Customers 6,000 10 60,000 D. Trading Acc 200 10 2,000

120,00
Stock 12,000 12 0 D. Trading Acc 400 10 4,000

6,000,0 420,00
Purchase 60,000 10 00 D. Trading Acc 42,000 10 0

Balance C/D

1,000,0
Customers 10,000 10 00

254,00
Stock 25,400 10 0

78,000 78,000 78,000 78,000

Drums Trade Account

Qty Rate Amount Qty Rate Amount

C. Debtors 900,00
C. Stock Acc 2,000 sent out 50,000 18 0

C. Stock Acc 400 10 4,000 Cash 400 1,000

C. Stock Acc 4,000 14 56,000 C. suspense a. 6,000 14 84,000

420,00
C. Stock Acc 42,000 10 0

C. suspense 1,400,0
a. 10,000 14 00

363,00
P&L 0
 985,00 985,00
56,400 0 56,400 0

Drums Suspense Account

Qty Rate Amount Qty Rate Amount
C. trading Balance
acc 6,000 14 84,000 B/D 6,000 14 84,000
C. trading
acc 10,000 14 140,000

Balance
C/D 10,000 14 140,000

16,000 224,000 16,000 224,000

Balance
B/D 10,000 14 140,000

Drums Debtors Account

Qty Rate Amount Qty Rate Amo

Balance B/D 6,000 50,000 C. trading acc 4,000 14 56,0

C. trading 900,00 588,

acc 50,000 18 0 Retained 42,000 14 0

140,
Closing Stock 10,000 14 0

Balance C/D 16,6

56,000 950,00 56,000 950,

 0 0
Balance B/D