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Can you explain how do we get COGS and Inventory? Exe Ltd sold supplies to Whi Ltd with a total sales value of $450,000. These
Can you explain how do we get COGS and Inventory?
Exe Ltd sold supplies to Whi Ltd with a total sales value of $450,000. These sales were completed on terms of cost plus 20%. Whi Ltd had $65,000 of these supplies in inventory on hand as of 30 June 20X2.
Date | Account | Debit $ | Credit $ | ||||
30/6/X2 | Sales | 450,000 | |||||
COGS | 439,167 | ||||||
Inventory | 10,833 | ||||||
(Elimination of intra-group sales revenue and COGS and elimination of URP in closing inventory) | |||||||
DTA | 3,250 | ||||||
Income tax expense | 3,250 | ||||||
(Recognition of the related income tax from consolidation adjustment to the carrying amount of inventory) |
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