Hello I know this might seem easy to some people or I may feel like a real dum person here but there is a bookkeeping question that is winding me up and feel a bit unconfident about it and would like someone to answer me to make me feel at ease.
Scenerio The shop sells artificial flowers, sundries such as oasis, baskets, Floral designs other things that make floral arranging worthwhile.
The flowers are bought at a wholesalers, some are individual flowers and some are in bulk.
Some of the floral designs are already on display in the shop and have used different stock items to create them. The shop has no register of stock on no computerised stock such as sage and is relied upon the bookkeeper to count the items every 6/12 months of the year.
Throughout the year trading goes well but at the end of the year at year end when the stock take is taken place There are some designs left on display in the shop. One design design invoice is paid for in advanced and ( is not finished at year end )
How do you begin and end with this task? There is certainly work in progress. I would also like someone to give me a view of the profit and loss account of how the work in progress should go.
This question looks more harder than it looks.
I would think the stock would have to be counted individually at NBV value and then transferred to the work in progress.
Work in progress: Debit Stock: Credit
Debit: Sales of designs Credit : Deferred income ( to take the amount away at year end ) till the design has been finished then,
Debit: Deferred income Credit: Sales ( the design is finished )
Is this correct
I would be grateful for any answers. If anyone answers, no one seems to answer :(
Darren
-- Edited by Daz37 on Tuesday 9th of June 2009 04:38:00 PM
