Accounting for the inventory offset entries at the end of the previous period, and the explanation o

The entries are too lazy to write, so let's talk about the ideas.

1. The wife buys a piece of candy for 1 yuan, and then sells it to her husband for 10 yuan.

The wife earned 9 yuan, but from the perspective of the whole family, it was just a change in the position of the inventory, this piece of sugar was still worth 1 yuan, although the wife earned 9 yuan, but the income and profits of the whole family did not increase. (This is called unrealized inside sales profit).

2. My husband sold this piece of sugar to others for 3 yuan.

My husband lost 7 yuan. But from the perspective of the whole family, although the husband lost money, the family's profit was more, buying it for 1 yuan and selling it for 3 yuan.

3. The family is the perspective of the consolidated statement, and the husband and wife are the perspective of the individual statement.

2008:

Borrow: Operating income 50

Credit: Operating costs 35

Inventory 15 is offset by 30% * 50 = 15 unrealized gains from internal transactions.

2009:

Debit: Prior Year Profit and Loss Adjustment 15

Credit: Inventories 15

Borrow: Operating income 30

Credit: Cost of Sales.

Inventories will be offset by unrealized gains from internal transactions after the sale of 320,000 inventories in 2009.

I won't explain it to you further in this book, but I'll just give you the most understandable words.

Suppose A is the parent company and B is a subsidiary, and B sells a batch of goods to A at a price of 1 million yuan, and the cost of this batch of goods on the books of company B is 700,000 yuan. At the end of the year, Company A sold 50% of the goods at a price of 600,000 yuan. Q: Offsetting entries.

Analysis:1Let's first look at the accounting treatment of the above transactions on the separate statements of A and B.

aMonomer report.

Borrow: Operating cost 50

Accounts receivable 60

Credit: Operating income 60

Inventories 50b Single-Item State Statement.

Borrow: Cost of doing business 70

Accounts receivable 100

Credit: Operating income 100

Inventory 702Let's take a look at how the merger should confirm the deal. Obviously, the transaction of B selling to A is an internal transaction and does not fully realize external income.

The above-mentioned transactions should be recognized as external sales revenue and cost of sales (i.e., external income of A, cost corresponding to B) at the merger level, and the income and cost of internal transactions need to be offset

1) 100% offset negotiation (irrelevant to whether the external sales are completed, all need to be offset): that is, 100% of the income of B to A, and the purchase cost of A to B.

Borrow: Operating income - b 100

Credit: Cost of Doing - A 100

2) 50% offset (only offset the part that is not external): that is, the cost of unrealized final external sales of B (70 * 50% = 350,000), and the purchase cost offset by A in (1) (A monomer statement only recognizes the internal sales cost of 500,000, while we offset 1 million and needs to be restored); The difference between the two is the inventory with internal unrealized profit left on statement A at the end of the period, which needs to be offset.

Borrow: Operating cost - a 50

Credit: Cost of Doing Business - B 35

Inventory 151) and (2) together, that is.

Borrow: Operating income 100

Credit: Cost of Doing Business 85

Inventory 15

When the value of raw materials is much lower than the book value, according to the requirements of the principle of prudence, the enterprise needs to make corresponding provisions for price decline, so when the inventory of the enterprise is impaired, how to do the specific accounting entries?

1. Provision for inventory decline and borrowing: asset impairment loss.

Credit: Provision for decline in value of inventories.

2. The reserve for inventory decline is reversed, and the provision for inventory decline is borrowed.

Credit: Asset impairment loss.

3. Carry-over of inventory decline standard, borrow: provision for inventory price decline.

Credit: Cost of Principal Operations.

What is Inventory Decline Provision?

The inventory decline provision account is used to account for the inventory decline provision withdrawn by the slag enterprise. Provision for inventory decline refers to the part of the inventory cost that cannot be recovered due to the damage of the inventory, the obsolescence of all or part of the inventory, or the fact that the sales** are lower than the cost at the end of the interim period or the end of the year, etc., shall be withdrawn according to the difference between the cost of a single inventory item and its net realizable value, and shall be included in the inventory decline loss.

What is an asset impairment loss?

Asset impairment loss refers to the corresponding loss recognized by the enterprise on the balance sheet date, after testing the asset, and judging that the recoverable amount of the asset is lower than its book value, and the provision for asset impairment loss. In principle, all assets of an enterprise should be recognized and measured in a timely manner when all assets are impaired, so asset impairment includes the impairment of all assets. However, depending on the nature of the assets, the specific criteria applied vary.

What is the cost of the main business?

The cost of main business refers to the cost incurred by the enterprise in the sale of goods, the provision of labor services and other business activities. Generally, when an enterprise recognizes the income from its main business such as the sale of goods and the provision of services, or at the end of the month, the cost of the goods sold and the services provided is transferred to the cost of the main business.

1) Definition of internal transactions in inventory.

An internal transaction can only be treated as an internal transaction if both the buyer and seller of the transaction asset are treated as inventory.

2) Seven sets of fixed offset formulas.

1) When the buyer of an internal transaction purchases inventory in the current year and does not sell it in the current year

Borrow: operating income.

Credit: Cost of Sales.

Stocks. 2) When the buyer of an internal transaction purchases the inventory in the current year and sells it in its entirety

Borrow: operating income.

Credit: Cost of Sales.

3) For the inventory purchased in the current year, part of it will be retained and part of it will be sold.

The first seller assumes that they are all sold:

Borrow: operating income.

Credit: Cost of Sales.

The inflated value of the retained inventory is then offset.

Borrow: Operating costs.

Credit: Inventory. 4) All inventories purchased in the previous year shall be retained in the current year.

Debit: Undistributed profits at the beginning of the year.

Credit: Inventory. 5) All inventory purchased in the previous year is sold in the current year.

Debit: Undistributed profits at the beginning of the year.

Credit: Cost of Sales.

6) For the inventory purchased in the previous year, a part of it will be retained and a part of it will be sold in the current year.

Let's assume that they are all sold:

Debit: Undistributed profits at the beginning of the year.

Credit: Cost of Sales.

The inflated value of retained inventory is offset as follows:

Borrow: Operating costs.

Credit: Inventory. 7) Provision for inventory decline in the treatment of inventory internal transactions.

First of all, the anti-price reduction preparation of the previous period is reversed

Borrow: Inventory. Credit: Undistributed profits at the beginning of the year.

For the treatment of the provision for inventory decline at the end of the period, it is necessary to first determine the amount that should be mentioned or offset from the perspective of individual companies, and then determine the amount that should be mentioned or offset from the perspective of the head office.

The entries are as follows: Debit: Inventory.

Credit: Asset impairment loss.

Or: Debit: Asset impairment loss.

Credit: Inventory. How offsetting entries are obtained from internal inventory transactions.

Assuming that all the internal transaction inventory is external**, it is necessary to offset the over-recognized revenue allowance and cost. Unrealized gains and losses on insider transactions are then offset.

Here, the value of the inventory is inflated due to internal transactions, so the inventory should be reduced.

And since it has been assumed that ** has been transferred to the cost of inventory, but the actual ** is not external, the operating cost of the over-offset should be adjusted back, so the operating cost is debited.

An internal transaction can only be treated as an internal transaction if both the buyer and seller of the transaction asset are treated as inventory.

Inventory Internal Transaction Offset Entries? To sum up, the internal transaction offset has been introduced in detail above, I believe you have a general understanding of the imitation of Douchun, if you have a deeper understanding of the relevant content, welcome to propose and again together **, today I will share it with you here, thank you for reading.

When the inventory is higher than its net realizable value, the enterprise should debit: asset impairment loss - provision for inventory decline according to the difference between the low and cost of the net realizable value of inventory, and credit: provision for inventory decline when reversed, according to the amount recovered, borrow:

Provision for decline in value of inventory, credit: asset impairment loss - provision for decline in value of inventory, when the enterprise carries forward the cost of sales of inventory, for the provision for decline in value of inventory that has been accrued and written off, borrow: provision for decline in value of inventory, credit:

Cost of Principal Operations (Other Operating Costs).

When the inventory next to the slip search is higher than its net realizable value, the enterprise should borrow: asset impairment loss - provision for inventory decline according to the difference between the net realizable value of inventory and the cost, credit: inventory decline provision, and when the provision for inventory decline has been accrued back, according to the amount recovered, borrow:

Provision for decline in value of inventory, credit: asset impairment loss - provision for loss of value of inventory, when the enterprise carries forward the cost of sales of inventory, for the provision for decline in value of inventory, borrow: provision for decline in value of inventory, letter oak.

Credit: Cost of Principal Business (Other Operating Costs).

In the course of the company's normal operation, inventory impairment will inevitably occur, in this regard, the accounting personnel should carry out the accounting treatment of inventory impairment provisions, and how to prepare the corresponding accounting entries?

1. When the inventory is higher than its net realizable value, the enterprise shall calculate the difference between the net realizable value of the inventory and the cost

Borrow: Asset impairment loss - provision for inventory decline.

Credit: Provision for decline in value of inventories.

2. When reversing the provision for inventory decline that has been accrued, the amount of recovery shall be followed:

Borrow: Provision for decline in value of inventories.

Credit: Asset Impairment Loss - Provision for Inventory Decline.

3. When the enterprise carries forward the cost of inventory sales, it has made provision for inventory price decline

Borrow: Provision for decline in value of inventories.

Credit: Cost of Principal Business (Other Operating Costs).

What is an asset impairment loss?

An asset impairment loss is a loss caused by the carrying amount of an asset being higher than its recoverable amount. It includes impairment losses on assets such as receivables, inventories, fixed assets, long-term equity investments, intangible assets, and loans. Impairment of assets such as construction in progress, biological assets lacking in production stools, engineering materials, goodwill, and investment real estate measured using the cost model are also included in asset impairment losses.

What is the cost of sales?

The cost of main business is the cost incurred by the enterprise in its business activities such as selling goods and providing labor services. Enterprises should set up a "cost of main business" account, which shall be used to calculate the actual costs incurred by the enterprise due to its daily activities such as selling goods, providing labor services, or transferring the right to use assets, and debit this account and credit the account of "inventory goods". At the end of the period, the balance of the main business cost is transferred to the "current year's profit" account, the "current year's profit" is debited, and the account is credited, and after the carryover, the "main business cost" account should have no balance.

Offsetting the cost of inventory, generally the enterprise returns or carries forward the inventory cost error, which needs to be modified or corrected, and the entry for the buried sale should be, borrowing: inventory bend to make teasing goods, credit: main business cost.

If there is an error in the carry-forward of inventory costs and it needs to be written off, the following entries can be made.