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Accounting for General Materials and Equipment by Periodic Inventory Method

1.6.2 Periodic inventory method

1.6.2.1 Characteristics

This is an accounting method based on actual inventory results to reflect the ending inventory value of goods and materials in the accounting books, thereby determining the value of goods and materials exported during the period according to the formula:

Value of goods sold during the period

= Beginning inventory value

+ Value of goods imported into warehouse during the period

- Ending inventory value

In the periodic inventory method, any increase or decrease in materials and goods is not tracked and reflected in inventory accounting accounts but is tracked and reflected in a separate accounting account, account 611 "Purchases".

The periodic inventory method is applied in businesses with many types of materials and goods with diverse specifications and designs, low value, and are used or sold regularly.

1.6.2.2 User account

Account TK611 “Purchases”

Account TK152,153 "Raw materials, Tools and equipment"

Content and structure of account TK152,153 "Raw materials, Tools and equipment"


In debt

Account 152,153 "Raw materials, Tools and equipment"

Have

Arise:

+ Transfer the actual value of raw materials and fixed assets in inventory at the end of the period.

Arise:

+ Carry over actual value of raw materials and fixed assets in inventory at the beginning of the period

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Accounting for General Materials and Equipment by Periodic Inventory Method

Content and structure of account Account TK611 "Purchase"


In debt

TK611 -

Purchase

Have

Arise:

Arise:

+ Transfer value of raw materials, fixed assets, goods

+ Transfer value of raw materials, fixed assets, goods

Beginning inventory

ending inventory

+ Value of raw materials, fixed assets, imported goods

+ Value of raw materials, fixed assets, exported goods

warehouse in period

warehouse in period


+ Value of raw materials, fixed assets, returned goods


for seller


1.6.2.3 Accounting method

- At the beginning of the period, transfer the value of raw materials, fixed assets and purchased goods in transit, record: Debit account 611 - Purchases

Have accounts 151, 152, 153 – Goods in transit, raw materials, fixed assets

- During the period, based on purchase documents and actual verification, import raw materials and fixed assets into the warehouse, the accountant records:

According to the VAT deduction method, record: Debit account 611 - Purchases

Debit account 1331 – Deductible VAT

Credit account 111,112,141,331 - Total payment According to direct VAT method, record:

Debit account 611 – Purchases

Credit account 111,112,141,331 – Total payment

- Discount when paying for purchasing materials and equipment is recorded as: Debit account 111, 112, 331

Credit account 515 – Financial activity revenue

- If the seller gives the business a trade discount, price reduction or returns raw materials, tools and equipment to the seller, record a reduction in the price of imported goods:

Debit account 111, 112, 331 – Actual amount received

Credit account 611 – Value of discounted or returned materials and equipment Credit account 133 – VAT (if any)

- When importing raw materials and fixed assets purchased in the previous period and now in transit, the accountant records: Debit account 611 - Actual value of raw materials and fixed assets imported into the warehouse

Credit account 111 – Goods in transit

- Based on the actual inventory results, raw materials and fixed assets in stock at the end of the period, reflecting the inventory results, the accountant records:

Debit account 151,152,153 - Ending inventory value Credit account 611 - Ending inventory value

Allocated to relevant accounts, accountants record:

Debit account 621,627,641,642 - Value of raw materials and tools used in production and business Credit account 611 - Value of raw materials and tools issued during the period

For CCDC used based on the value allocated to the objects: Debit account 621,627,642 - 100% allocation type

Debit account 142, 242 - Multiple allocation type Credit account 611 - Purchases

Diagram 1.5: General accounting of raw materials and fixed assets according to periodic inventory method

TK111,112,141,331 TK 611 TK621,627,641,642,241

TK133

Raw materials, fixed assets purchased during the period

TK151,152,153

Carry over raw materials, fixed assets in inventory and on the way at the beginning of the period

Export of raw materials and tools used in production and business

Account 111,112,331

Export raw materials, fixed assets to return or discount to seller

TK151,152,153

Contact NVL, CCDC is on the way at the end of the period

CHAPTER 2: CURRENT STATUS OF ACCOUNTING FOR RAW MATERIALS, TOOLS AND EQUIPMENT AT CAO MINH CONSTRUCTION AND TRADING COMPANY LIMITED

2.1 General introduction of CAO MINH Construction and Trading Company Limited.

2.1.1 History of formation

2.1.1.1 Company formation and development process

Business type: Limited Liability Company with Three or more Members

Company Name: Cao Minh Construction and Trading Company Limited

Trading name: Cao Minh Trading Construction Co., Ltd

Abbreviated name: Cao Minh Co., Ltd

Head office address: 192 Nguyen Thai Son, Ward 4, Go Vap District, HCMC

Tax code: 0301590338

 Email address: caominhmeo@hcm.vnn.vn

Cao Minh Construction and Trading Company Limited was founded by 3 members:

+ Mr. Le Phuong Vu

+ Mrs. Nguyen Thi Minh Hieu

+ Mrs. Vo Truong Nhi Lam

In 1999, the current state of technology was not yet developed much. In Vietnam, the requirements of a developing society were increasingly high, leading to the emergence of many businesses in the industry in fierce competition.

Mr. Le Phuong Vu was previously a student at the University of Architecture. He had the intention and initiative to establish a company specializing in construction and interior decoration. From there, he invited two of his friends to contribute capital to do business together.

After completing the necessary procedures, the Company was officially licensed on January 22, 1999, according to the Business Registration Certificate issued by the Department of Planning and Investment on January 22, 1999, Business Registration Number: 070740. The area of ​​the premises is 600m2, of which 100m2 is for transaction office and working room, the remaining 500m2 is for warehouse and mechanical workshop.

Stages of company development:

From 1999 to 2000, the Company researched the design and production of baby electronic products and swings. By understanding the market fluctuations in the construction industry, the Company chose construction as its strength. The Board of Directors identified the construction industry as the spearhead, the Company's vital strength.

From 2001 to 2004, the Company participated in the construction of Tan Thuan Export Processing Zone, Ben Luc Long An Industrial Park, Rajchienr Gas Factory, Vina Tafong Steel Factory, Chinfon Animal Feed Processing Factory. The Company also produces and trades swings, cradles, children's beds and some nursery equipment. The products are made of seamless steel pipes, electrostatically painted and can be disassembled for transportation.

2.1.1.2 Industry, field of operation, business characteristics

- Business lines according to business license:

Civil and industrial construction; Site leveling; House repair and interior decoration; Manufacturing mechanical products; Consignment agent.

Consulting on investment and construction works: exploration, testing, establishment and appraisal of investment and construction projects, design; Establishing total estimates and appraising designs and total estimates; Project management and implementation; Construction quality inspection; Consulting on bidding and economic contracts on design, supply of equipment and materials, and construction and installation of works.

Construction supervision of civil and industrial works.

2.1.1.3 Capital structure


No.

Member Name

Charter Capital (VND)

1

LE PHUONG VU

750,000,000

2

NGUYEN THI MINH HIEU

600,000,000

3

ZHANG EYE LAM'S RING

150,000,000

2.1.2 Organizational structure in the company

Human Resources Department

Diagram 2.1: Organizational chart of Cao Minh Trading-Construction Company Limited



Board of Directors


Vice president



Material Planning Department

Finance and Accounting Department

Construction Department


Factory

Construction Team


Production Worker

Installation Team

Team Combination


Function of each part

+ Board of Directors

- As the representative and highest responsible person of the company before the law, partners, customers, and suppliers for all production and business activities of the Company.

- General manager of all daily activities of the company, responsible for business activities as well as financial situation of the company.

- Make decisions on the organizational structure, salary structure and bonuses for the company's employees. Appoint and dismiss key staff, and report annual financial reports.

+ Deputy Director

- Assists the director in managing some areas of the Company as assigned by the Director of the Company, is responsible to the Director of the Company and the law for the assigned tasks. The Deputy Director of the Company is appointed, dismissed, rewarded and disciplined by the General Director of the Company.

+ Material planning department

- Advise the director, manage materials and equipment. Research and monitor materials and equipment, monitor and plan the supply and use of materials, organize and manage material warehouses.

+ Finance - Accounting Department

- Advise the project manager on financial revenue and expenditure plans, update documents, monitor the revenue and expenditure books of the project management board, serve consulting engineers, allocations, loans and monthly volumes with teams after approval by the project owner. Implement all state policies on finance, taxes, salaries for the office and teams. Monthly reports, project settlement.

+ Factory

- Serving the construction and completion process such as assembling doors, electricity, water supply and drainage systems for construction works.

+ Human resources department

- Responsible for human resource management, salary calculation, rewards, implementation of social insurance, health insurance, unemployment insurance, trade union fees, labor protection for officers and employees, administrative management, management of tools and equipment, care for the lives of officers and employees and welfare work.

+ Construction room

- Carry out tasks assigned by the project manager and be responsible for the technical, quality and progress of the project. The team leader is responsible for arranging accommodation, working space, warehouse, yard, vehicles, equipment and human resources in accordance with the progress and construction technology. Check and supervise daily the construction process according to the design, ensuring quality. The functional departments and teams are a unified entity responsible for helping each other complete the tasks assigned by the project manager.

Comment

The arrangement of each separate department creates independence between departments, limiting the impact that hinders work because each department has separate functions and tasks, and each person's work is independent of each other.

The organizational structure of the company's management apparatus shows the correlation and mutual support to create favorable conditions for the successful completion of assigned tasks. Thereby, it demonstrates the logic and science in management in all aspects to help the company carry out production and business activities with high efficiency.

2.1.3 Human resources situation

2.1.3.1 Company's human resource structure

Most of the company's staff are trained and assigned to jobs that are appropriate to their expertise and profession. In particular, technical staff are formally trained, highly qualified, competent and experienced in construction management and installation, and are regularly trained, supplemented and improved in the country and abroad through training programs.

The human resource structure is divided according to many different criteria. Depending on management requirements and human resource evaluation requirements, the company chooses different classification methods.

2.1.3.1.1 Personnel structure by educational level

According to educational level, employees in the Company are divided according to the level and professional qualifications that the employees have achieved. Based on this criterion, we can evaluate the professional level, as well as the ability to train, develop and arrange work for employees.

The company evaluates the education level of employees according to the following levels: Postgraduate, University

- College, High School, Technical Workers, General Laborers. Specifically as follows:

Table 2.1: Personnel structure by level of Cao Minh Construction - Trading Company Limited


Level

2011

2012

2013

Number (People)

Rate (%)

Number (People)

Rate (%)

Number (People)

Rate (%)

Above University

1

3.03

1

2.94

1

2.94

University – College

12

36.36

13

38.24

13

38.24

High School

3

9.09

3

8.82

3

8.82

Popular

3

9.09

2

5.88

2

5.88

Technical worker

14

42.43

15

44.12

15

44.12

Total

33

100

34

100

34

100

(Source: Human Resources Department - Cao Minh Construction - Trading Co., Ltd.)

Number of employees is calculated as of December of each year.

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