Chapter 2 National Income - Part 3 Value Added Method

Economics Class 12
Macroeconomics

Example 7

Calculate value of output from the following data:

 Particulars Rs lakhs (i) Net value added at factor cost 100 (ii) Intermediate consumption 75 (iii) Goods and Services Tax (GST)* 20 (iv) Subsidy 5 (v) Depreciation 10

Example 8

Calculate Change in Stock

 Particulars Amt in crores Sales 400 Net value added at Factor Cost 200 Subsidies 10 change in stock ? Depreciation 40 Intermediate consumption 100

Question 5

Calculate Value of Output

 Particulars Amt in lakhs Subsidies 10 Intermediate consumption 150 Net addition to stocks -13 Depreciation 30 GST 20 Net Value added at Factor Cost 250

Example 12

Calculate Value of Output

 Particulars Amt in crores Raw Materials from domestic market 400 Increase in unsold stock 60 Import of raw material 120 Domestic sales 1200 Replacement of fixed capital 50 Power charges 20 Exports 200 Import of machinery 40 Gst 10 Subsidy 30 Goods used for self consumption 10

How to Calculate Sales if Value of output Given

Value of Output =Sales + Change in Stock

Value of Output =Sales + Closing Stock -Opening Stock

Value of Output-Closing Stock + Opening Stock=Sales

Sales = Value of Output-Closing Stock + Opening Stock

Question 5

Calculate Sales

 Particulars Amt in lakhs Net Value added at Factor cost 300 Net addition to stocks -20 GST 30 Depreciation 10 Intermediate consumption 100 Subsidy 5

Question 11

Calculate Sales

 Particulars Amt in lakhs Subsidies 200 Opening Stock 100 Closing Stock 600 Intermediate consumption 3000 Consumption of fixed capital 700 Profit 750 Net value added at factor cost 2000

NCERT Questions

No questions in this part

Transcript

Value Added with Missing Information Questions Example 7 CALCULATION OF VALUE ADDED VALUE OF OUTPUT 180 (125+75) Less VALUE OF INTERMEDIATE CONSUMPTION 75 VALUE ADDED 125 CALCULATION OF NET VALUE ADDED AT MARKET PRICE GDP Mp (Gross Value Added at Market Price) 125 110+(-5) Less Net Indirect Taxes 15 (20-5) Gross Value Added at Factor Cost 110 (100+10) Less Depreciation 10 Net Value Added at Factor Cost 100 Step 1 Calculate Gross Value Added at Factot Cost GVAFC-Dep =NVA FC GVA fc =NVA FC+Dep =100+10 =110 Step 2 We calculate Net Indirect Taxes Net Indirect Tax = Taxes-Subsidy =20-5 =15 Step 3 We calculate Gross Value Added at Market Price GVA MP - Net Indirect Tax= GVA FC GVA MP=GVAFC+Net Indirect Tax =110+15 =125 Step 4 Calculate Value Added Value Added =Gross Value added at Market Price= 125 Step 5 Calculate Output Output-Input=Value Added Output=Value Added+Input =125+75 =180 Calculate value of output from the following data: Particulars Rs lakhs (i) Net value added at factor cost 100 (ii) Intermediate consumption 75 (iii) Goods and Services Tax (GST)* 20 (iv) Subsidy 5 (v) Depreciation 10 Solution Calculate Change in Stock Particulars Amt in crores Sales 400 Net value added at Factor Cost 200 Subsidies 10 change in stock ? Depreciation 40 Intermediate consumption 100 CALCULATION OF VALUE ADDED Sales 400 Change in stock x 400 + x Less VALUE OF INTERMEDIATE CONSUMPTION 100 VALUE ADDED 300 + x CALCULATION OF NET VALUE ADDED AT MARKET PRICE GDP Mp (Gross Value Added at Market Price) 230 (240 - 10) Less Net Indirect Taxes -10 Gross Value Added at Factor Cost 240 (200+40) Less Depreciation 40 Net Value Added at Factor Cost 200 300 + x = 230 x = -70 Q5,Page 109 Calculate Value of Output Particulars Amt in lakhs Subsidies 10 Intermediate consumption 150 Net addition to stocks -13 Depreciation 30 GST 20 Net Value added at Factor Cost 250 Solution CALCULATION OF VALUE ADDED Sales x Change in stock -13 x-13 Less VALUE OF INTERMEDIATE CONSUMPTION 150 VALUE ADDED x-163 CALCULATION OF NET VALUE ADDED AT MARKET PRICE GDP Mp (Gross Value Added at Market Price) 290 (280 + 10) Less Net Indirect Taxes 10 Gross Value Added at Factor Cost 280 (280+30) Less Depreciation 30 Net Value Added at Factor Cost 250 x - 163 = 290 x = 453 Sales = 453 Value of output = Sales + change in stock Value of output = 453-13 = 440 ppt bana dena DIFFERENT TYPES OF IMPORT I I IMPORT OF GOODS IMPORT OF MACHINERY I I It is Intermediate Consumption It is not Intermediate Consumption We calculate Depreciation on it Example 12 Calculate Value of Output Particulars Amt in crores Raw Materials from domestic market 400 Increase in unsold stock 60 Import of raw material 120 Domestic sales 1200 Replacement of fixed capital 50 Power charges 20 Exports 200 Import of machinery 40 GSt 10 Subsidy 30 Goods used for self consumption 10 Solution Solution CALCULATION OF VALUE ADDED Sales 1400 Change in stock 60 goods used for self consumption 10 VALUE OF OUTPUT 1470 Less Power charges 20 Import of raw materials 120 Raw Materials from domestic market 400 VALUE OF INTERMEDIATE CONSUMPTION 540 VALUE ADDED 930 CALCULATION OF NET VALUE ADDED AT MARKET PRICE GDP Mp (Gross Value Added at Market Price) 930 Less Net Indirect Taxes -20 Gross Value Added at Factor Cost 950 Less Depreciation 50 Net Value Added at Factor Cost 900 How to Calculate Sales if Value of output Given Value of Output =Sales+Change in Stock Value of Output =Sales+Closing Stock -Opening Stock Value of Output-Closing Stock+Opening Stock=Sales Sales = Value of Output-Closing Stock + Opening Stock Q7 Calculate Sales Particulars Amt in lakhs Net Value added at Factor cost 300 Net addition to stocks -20 GST 30 Depreciation 10 Intermediate consumption 100 Subsidy 5 Solution CALCULATION OF VALUE ADDED Sales x Change in stock -20 VALUE OF OUTPUT x-20 Less VALUE OF INTERMEDIATE CONSUMPTION 100 VALUE ADDED x-120 CALCULATION OF NET VALUE ADDED AT MARKET PRICE GDP MP (Gross Value Added at Market Price) 335 Less Net Indirect Taxes 25 Gross Value Added at Factor Cost 310 Less Depreciation 10 Net Value Added at Factor Cost 300 x-120 = 335 x = 455 Sales = 455 Q11 Calculate Sales Particulars Amt in lakhs Subsidies 200 Opening Stock 100 Closing Stock 600 Intermediate consumption 3000 Consumption of fixed capital 700 Profit 750 Net value added at factor cost 2000 Solution CALCULATION OF VALUE ADDED Sales x Change in stock 500 VALUE OF OUTPUT x + 500 Less VALUE OF INTERMEDIATE CONSUMPTION 3000 VALUE ADDED x - 2500 CALCULATION OF NET VALUE ADDED AT MARKET PRICE GDP Mp (Gross Value Added at Market Price) 2500 Less Net Indirect Taxes -200 Gross Value Added at Factor Cost 2700 Less Depreciation 700 Net Value Added at Factor Cost 2000 x - 2500 = 2500 x = 5000 Sales = 5000

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Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years and a teacher from the past 18 years. He teaches Science, Economics, Accounting and English at Teachoo