Professional Documents
Culture Documents
METHOD
Necessary when:
Missing inventory
Illustration:
Illustration:
Inventory, Beg P50,000
Purchases P100,000
GP rate 25% based on sales
Sales P80,000
10,000 – damaged
2,500 – NRV
Sales 500,000
Sales Returns 20,000
Assumption:
Large number of rapidly changing items have similar margin for which it
is impracticable to use other costing method
Department stores
Supermarkets
Convenience stores
Classifications:
Same ending inventory at retail, but sale at retail is not so compute COGS as
your difference between TGAS
Marks
Treatment of Items
Purchase Discount
Purchase Return
Purchase Allowance
Sales Returns
Illustration:
Cost
Mark
Retail
Illustration: