Cost of Sales Inventories Mark FieldingPritchard mefielding com

Cost of Sales Matching principle If we sell 1000 apples, what is the cost

Cost of Sales Interactive Q 2 P 183 Dr Expenses Cr Purchases 64500 Dr

IAS 2 Inventory Interactive Q 2 P 183 Dr Expenses Cr Purchases 64500 Dr

IAS 2 Inventory p 186 Dr Cr 0 Inventory 2000 Capital 2000 1 Purchases

IAS 2 Inventory Value at lower of cost, including all costs or NRV, net

IAS 2 Inventory In manufacturing company inventory will consist of direct material, direct labour

IAS 2 Inventory FIFO 1 May 3 May 4 May 9 May 11 May

IAS 2 Inventory AVCO Receipt Issue Cost 1 May 100 200 3 May 400

Mark up & Gross Margin Mark Up Gross Margin Cost Plus basis % of

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Cost of Sales & Inventories Mark Fielding-Pritchard mefielding. com 1

Cost of Sales Matching principle If we sell 1000 apples, what is the cost of 1000 apples See 1. 1 & 1. 3 Pages 179, 180 Op Inventory + Purchases – Cl Inventory We also include carriage in Inventory write offs also go in Cof. S (1. 4, P 182) mefielding. com 2

Cost of Sales Interactive Q 2 P 183 Dr Expenses Cr Purchases 64500 Dr Receivables Cr Other Income 38700 mefielding. com 3

IAS 2 Inventory Interactive Q 2 P 183 Dr Expenses Cr Purchases 64500 Dr Receivables Cr Other Income 38700 mefielding. com 4

IAS 2 Inventory p 186 Dr Cr 0 Inventory 2000 Capital 2000 1 Purchases 4300 Payables 4300 2 Payables 3600 Cash 3600 3 Receivables 8000 Sales 8000 4 Cash 3200 Receivables 3200 5 NCA@Cost 1500 Cash 1500 6 Expenses 900 Cash 900 7 Inventory (SOFP) 1800 Inventory (IS) 1800 mefielding. com 5

IAS 2 Inventory Value at lower of cost, including all costs or NRV, net income from selling after all ancillary costs such as rectification, modification, commissions and non recoverable taxes Cost NRV Lower Value Total mefielding. com A 20 23 20 B 9 8 8 C 14 12 12 4000 1200 8800 3600 6

IAS 2 Inventory In manufacturing company inventory will consist of direct material, direct labour & direct overhead- conversion costs Raw materials, WIP & finished goods mefielding. com 7

IAS 2 Inventory FIFO 1 May 3 May 4 May 9 May 11 May 18 May 20 May 31 May mefielding. com Receipt Issue 100 400 200 300 400 100 Cost Remainder 200 840 200+210 636 630+212 240 212 0 0 212+240 100 8

IAS 2 Inventory AVCO Receipt Issue Cost 1 May 100 200 3 May 400 840 4 May 200 416 9 May 300 636 11 May 400 840 18 May 100 240 20 May 100 2. 20 31 May mefielding. com 200 220 Av Unit Cost Remainder 0 2. 08 0 (624+636)/600 = 2. 10 100 [(200 x 2. 10)+240]/ 300= 2. 20 100 9

Mark up & Gross Margin Mark Up Gross Margin Cost Plus basis % of sales price If mark up = 30% & cost is £ 100 Sales price will be 130 If gross profit is 30% & cost is 140 Selling price is $200 mefielding. com 10