Cost Of Goods Sold Statement

Financial Statement: Financial statement are the final product of an accounting system. A typical set of financial statements include (1) Balance Sheet (2) Income Statement(3) Statement of changes in Financial Position.

1.Balance Sheet: Balance Sheet means a sheet containing a list of account balances of assets, liabilities and owner’s equity as on a specified date. It shows financial position also. Balance sheet is also called statement of financial position.

2.Income Statement: Income statement is the summary of revenues and expenses for an accounting period. It measures the results of operations of the accounting entity in terms of profit or loss for the period covered. It is also called statement of operations.

3.Statement of Changes in Financial Position: This statement shows sources and uses of financial resources during the accounting period. This statement is prepared from the accounting data originally collected for balance sheet and income statement. Performa: Company Name:………… Cost of goods Manufactured& Sold Statement. For the Year Ended:…………

Details Opening Raw Material Add-Purchases ---------------Less-Discount on purchase --------Less – Return on purchase ---------Add- Freight in Add- Carriage in =Material available for use

Amount

Amount

Less-Closing Raw Material =Material Consumed/Used Add-FOH(w1) =Total Manufacturing Cost Add-Direct Labour =Prime Cost Add-Opening W-I-P =Cost of goods available for manufacturing Less-Closing W-I-P =Cost of goods manufactured Add-Opening Finished goods =Cost of goods available for sales Less-Closing Finished goods (Add or Less FOH working 2) =Cost of goods Sold NOTE: WORKING 1:

If the FOH(factory overhead) is given applied at the direct labour or any other thing which is in the CGS statement then in the CGS statement FOH applied written if not given the applied FOH then written in the CGS statement Actual FOH. WORKING 2:

If actual and applied both are given in the CGS statement. Fist of all Calculation of the Actual FOH

Details

Amount

Actual Factory overhead(FOH) Less-Factory Overhead(FOH) Applied =Under / Over Applied NOTE: 1:(If FOH applied less than Actual FOH then extra amount add in the CGS Statement named over applied ) 2:(If FOH applied more than Actual FOH then extra amount less in the CGS statement named under applied)

Company Name:--------------

Income Statement:----------------As the Year Ended:--------------Details

Amount

Amount

Sales Less – discount on sales Less – return on sales =Net sales Less- CGS =Gross Profit / Loss Less Other Expenses: Marketing Exp. Selling Exp. Distribution Exp. Administrative Exp. =Net Profit / Loss Some Important Formulas: 1:Prime Cost= Material used + Direct Labour 2:Conversion Cost = Direct Labour + Factory Overhead (applied) 3:Total Manufacturing Cost (T.M.C)= Material used + Direct Labour + FOH 4:No.of Units Manufactured = Units sold + Finish Goods Closing – Finish Goods Opening 5: Per Unit Manufactured Cost = Cost of Goods Manufactured ÷ Units Manufactured 6: Gross Profit Rate on Cost = Gross Profit ÷ C.G.S × 100 Ans= --------% 7: Gross Profit On Sale = G.P ÷ Sale × 100 Ans= --------% 8: Net Profit Rate on Cost = N.P ÷ C.G.S × 100 Ans= --------%

9: Net Profit Rate on Sale = Net Profit ÷ Sale × 100 Ans= --------% 10:Gross Profit Per Unit Cost = G.P ÷ Units Sold = Rs. ----------Per Unit Cost. 11:Net Profit Per Unit Cost = N.P ÷ Units Sold = Rs.------------Per Unit Cost. Note 1: If find out the per unit cost of Net or Gross Profits(N.P,G.P) then should be taken the No. of Units is Units Sold always. Note 2: When obtain the per unit cost of any thing then not multiply the 100 and when we change the anything in percentage then multiply the 100. Note 3: If FOH applied more than 100% then apply this formula. Amount × 100 ÷ rate of applied For Example = 150 % FOH of Direct Labour = 9000 It is solved by this method 9000 × 100 ÷ 150

Calculation of Actual FOH: Details Heat and power Indirect material consumed Indirect labour Depreciation of any Asset Tool expenses Fire insurance Misc. FOH Factory office salaries Superintendence Factory taxes Employer’s contribution provident fund (any other expense which is related to Factory)

Amount

Indirect Materials: Cotton waste Factory office supplies Fuel, oil coal etc. Lubricants

Perishable tools Repair and maintenance stores.

Indirect Labour: Cleaners, janitors, helpers Factory office staff Foreman, supervisors etc Idle time wages Overtime premiums Payroll contributions and taxes Paid leaves Quality inspectors

Other indirect Expenses: Depreciations Electricity and gas bills Insurance Normal rework on defective production Normal spoilage Property taxes Rent Service departments’ expenses