2.2.2. Accounting for cost of goods sold at Mai Huong Company Limited.
2.2.2.1. Content of cost of goods sold.
In the production and business process, if the enterprise wants to bring maximum profit, it must strictly manage the business capital and use the enterprise's capital most effectively. To do so, the enterprise must determine the most accurate expenses. Cost of goods sold is one of the expenses that accounts for a large proportion in the production and business process.
The unit price of inventory is always changed based on the change in the unit price of inventory. That is, after each purchase of inventory, the accounting enterprise must recalculate the unit price of imported goods based on the value and quantity of inventory currently available at the enterprise.
Weighted average method:
2.2.2.2. Accounting documents and accounts used.
Accounting documents used:
- Warehouse delivery note
- Minutes of handover.
- Other relevant documents.
Accounts and accounting books used.
- Account 632: cost of goods sold and other related accounts.
- General Journal.
- Ledger account 632
2.2.2.3. Cost of goods sold accounting process.
Example 3 (continued from example 1) On December 6, 2016, the Company sold 1,050 pairs of leather shoes to Vy Thanh Company Limited, with a unit price of VND 500,000/pair (excluding 10% VAT), collected by bank transfer.
Cost of goods sold:
Debit account 632: 477,540,000
Credit account 156: 477,540,000
Based on the warehouse delivery note dated December 7 (form 2.7). Record in the general journal (form 2.9). Ledger account 632 (form 2.10)
The company calculates the cost of goods sold using the weighted average method as follows:
- At the beginning of December 2016, the inventory of leather shoes was 950 pairs. The unit price was 450,000 VND/pair. Total amount: 950 x 450,000 = 427,500,000 VND.
December 2nd: Imported 300 pairs of leather shoes from the factory at a cost of 470,000 VND/pair.
On December 6, sold 1,050 pairs to Vy Thanh Company Limited with the following ex-warehouse unit price:
427,500,000 + 470,000x300 | = 454,800 VND | |
950 + 300 |
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Warehouse value = 1050 x 454,800 = 477,540,000 VND
Example 4 (continued from example 2)
On December 7, 2016, sold 50 pairs of canvas shoes to LICHI Company Limited, with a unit price of 320,000 VND/pair (excluding 10% VAT). Collected in cash.
Cost of goods sold:
Debit account 632: 13,500,000
Credit account 156: 13,500,000
Based on warehouse delivery note No. 08/12 (form No. 2.8), record in General Journal (form No. 2.9) and ledger TK632 (form No. 2.10)
- Inventory at the beginning of December 2016 was 850 pairs, unit price 270,000 VND/pair.
From December 1 to December 6, there were no transactions related to fabric shoes. Therefore, the unit price of 50 pairs of fabric shoes for LICHI Company Limited is 270,000 VND/pair.
Form No. S03a-DNN
(Issued under Decision No. 48/2006/QD-BTC dated September 14, 2006 of the Minister of Finance)
Export value on December 7 = 270,000 x 50 = 13,500,000 VND.
Unit: Mai Huong Company Limited
Address: Kieu Dong, Hong Thai, An Duong, HP.
December 6, 2016 | |
Number:PX07/12 | Debit account 632 |
Have account 156 | |
Consignee name: Pham Minh Duc Address: Vy Thanh Company Limited
Reason for release: sale Released from warehouse: number 1
TT number
Name, brand, specification, quality, materials (product, goods) | Code | Unit of measure | Quantity | Unit price | Total amount | ||
According to evidence from | Actual Output | ||||||
1 | Leather shoes | pair | 1050 | 1050 | 454,800 | 477,540,000 | |
Add | 477,540,000 | ||||||
Total amount (in words): Four hundred seventy seven million, five hundred forty thousand dong./.
December 6, 2016
vote
FounderReceiver row | Storekeeper | Chief Accountant | Manager | |
(Signature, full name) | (Signature, full name) | (Signature, full name) | (Signature, full name) | (Signature, full name) |
Table 2.7 warehouse delivery note 07/12
(Source: Accounting Department of Mai Huong Company Limited)
Form No. S03a-DNN
(Issued under Decision No. 48/2006/QD-BTC dated September 14, 2006 of the Minister of Finance)
Unit: Mai Huong Company Limited
Address: Kieu Dong, Hong Thai, An Duong, Hai Phong
December 7, 2016 | |
Number:PX08/12 | Debit account 632 |
Have account 156 | |
Consignee name: Pham Minh Duc Address: LICHI Company Limited.
Reason for release: sale. Released from warehouse: No. 2
TT number
Name, brand, specification, quality, materials (product, goods) | Code | Unit of measure | Quantity | Unit price | Total amount | ||
According to document | Actual Output | ||||||
1 | Canvas Shoes | Pair | 50 | 50 | 270,000 | 13,500,000 | |
Add | 13,500,000 | ||||||
Total amount (in words): Thirteen million five hundred thousand Dong./.
December 7, 2016
vote
FounderReceiver row | Storekeeper | Chief Accountant | Manager | |
(Signature, full name) | (Signature, full name) | (Signature, full name) | (Signature, full name) | (Signature, full name) |
Chart No. 2.8 Warehouse delivery note 08/12
(Source: Accounting Department of Mai Huong Company Limited)
Form No. S03a-DNN
(Issued under Decision No. 48/2006/QD-BTC dated September 14, 2006 of the Minister of Finance)
Excerpt from general journal
Unit: Mai Huong Company Limited
Address: Kieu Dong, Hong Thai, An Duong, Hai Phong.
GENERAL LOG
2016
Unit: VND
Document
Interpretation | SHT K | Number of occurrences | |||
SH | NT | In debt | Have | ||
………………. | |||||
PX07/12 | 06/12 | Delivered 1050 pairs of leather shoes to the Company. Vy Thanh LLC. | 632 156 | 477,540,000 | 477,540,000 |
PX08/12 | 07/12 | Exported 50 pairs of canvas shoes to the company. LICHI LTD | 632 156 | 13,500,000 | 13,500,000 |
………. | |||||
UNC28 | 12/13 | Office supplies payment | 6422 133 112 | 5,000,000 500,000 | 5,500,000 |
…………. | |||||
Add the generated numbers | 200,474,771,277 | 200,474,771,277 | |||
December 31, 2016
Preparer Chief Accountant Director
(Sign, full name) (Sign, full name) (Sign, full name)
Table 2.9 General journal excerpt.
(Source: Accounting Department of Mai Huong Company Limited)
Form No. S03b-DNN
( Issued under Decision No. 48/2006/QD-BTC dated September 14, 2006 of the Minister of Finance)
Ledger excerpt.
Unit: Mai Huong Company Limited
Address: Kieu Dong, Hong Thai, AD, HP
LEDGER
Account 632 - Cost of goods sold 2016
Unit: VND
Document
Interpretation | TK DU | Amount | |||
SH | NT | In debt | Have | ||
Opening balance | |||||
PX07/12 | 06/12 | Ship 1050 pairs of shoes skin for Vy Thanh Company. | 156 | 477,500,000 | |
PX08/12 | 07/12 | Exported 50 pairs of canvas shoes for LICHI Company. | 156 | 13,500,000 | |
......... | |||||
PKT26/12 | 12/31 | Cost of goods transferred | 911 | 31,654,265,416 | |
Add the generated numbers | 31,654,265,416 | 31,654,265,416 | |||
Closing balance | |||||
December 31, 2016
Preparer Chief Accountant Director
(Sign, full name) (Sign, full name) (Sign, full name)
Table 2.10 Excerpt from ledger account 632
(Source: Accounting Department of Mai Huong Company Limited)
2.2.3. Business management cost accounting.
Business management costs are costs incurred related to business management, administrative management and general management of the entire enterprise.
2.2.3.1. Characteristics of business management costs.
Business management costs include the following:
- Management staff costs
- Fixed asset depreciation costs.
- Taxes, fees, charges,…
- Contingency costs.
- Cost of purchased services such as: electricity, water, telephone, reception, etc.
2.2.3.2. Documents used.
- Payment voucher.
- VAT invoice.
- Depreciation allocation table, salary payment table,...
- Other relevant documents,....
2.2.3.3. Accounting accounts used.
- Account 642 – Business management expenses.
- Related accounts: Accounts 111, 112,131,133,…
- General Journal.
- Ledger account 642 and related books.
2.2.3.4. Accounting process.
Payment voucher, Debit note,
VAT invoice,…
GENERAL LOG
GENERAL LEDGER TK 642
Balance sheet
number of occurrences
FINANCIAL REPORT
Note:
Diagram 2.6 - Business cost accounting process.
(Source: Accounting Department of Mai Huong Company Limited)
Daily recording: Monthly or periodic recording:
Example 5: On December 5, 2016, payment of telecommunication fees for November 2016 based on telecommunication invoice (form 2.11), payment voucher No. 15/12 (form 2.12) and related documents, the accountant makes the following entries:
Debit account 642: 1,590,909
Debit account 133: 159,091
Credit account 111: 1,750,000
Accounting records in the General Journal (Form 2.13) and the Ledger (Form 2.14)