How to record cost of goods sold in a manufacturing company

[rameshbabu]

Hello All

I need your help to solve the following issue. We are a plastic product manufacturing firm and need to show the balance stock value on our Trial balance as Current asset. Our software developers required the type of JV that we need to post. Our sequence as follows.

Finished goods receipts from Production JV as follows

Production Receipt A/c Dr
Warehouse Factory Stock A/C Cr

While Creating Sales invoice two JV are creating

Customer A/c Dr
Sales A/c Cr


Warehouse Factory Stock A/c Dr
Production Receipt A/c Cr

Warehouse factory stock Type of account is Asset so the balance will come to Current asset at Balance Sheet

What should be the Type of Account for Production Receipt.

 

[UncleSam]

Question. I understand "warehouse factory stock" is an inventory asset account but what kind? Finished goods, work-in-process (WIP), or raw materials?

 

[rameshbabu]

This is finished goods

 

[UncleSam]

I obviously would need to see your accounting software to give you a complete, informed answer. However, it appears that "production receipt" is a temporary holding account. As such this would be an asset account

What is confusing to me is that when you record the sale it debits "warehouse factory stock" and credits "production". However, when you sell manufactured goods it should generally be a credit to inventory and a debit to cost of goods sold. Which in this case may mean you may have to make an additional entry to record the cost of goods sold.

Hope this helps you to figure it out somewhat
ما شاء الله