-AFAR- CSD - 04 Consignment Sales.pdf

06 Consignment Sales AFAR By CSD AFAR BY CSD AFAR BY CSD Consignment Sales Consignment Sales – constitutes the CAP CAP...

06 Consignment Sales AFAR By CSD AFAR BY CSD AFAR BY CSD Consignment Sales Consignment Sales – constitutes the CAP CAP EXP CONSIGNMENT SALES transfer of possession of merchandise without the transfer of title from the owner Supplier C’OR C’EE Customer Consignor (owner) sends goods to consignee (agent) to sell for a EXP EXP EXP commission Revenue recognized by the consignor Costs of good sold only when the consignee sells the goods, Capitalizable/ when control is transferred (at a point in Inventoriable Costs Inventory time method). Capitalizable Costs 1. Manufacturing Costs Cost of purchase (purchase price) Cost of Sales Remittance Cost of conversion (DL, FOH) Manu costs / u * units sold XX Sales/Collections XX Other costs (necessary to bring the Direct costs / u * units sold XX Reimbursable expenses: invty to its intended condition) Direct costs / u * units returned XX Freight-out Cost of goods sold XX Freight-returned 2. Director Costs (C’OR → C’EE) Freight-collect Freight, handling, cartage fees Net Income Advert, etc. (XX) Sales XX Commission (sales * %) (XX) Non-capitalizable Costs (EXPENSED) COGS (from above) XX Advances (XX) Freight-out (to final customer) GP XX Cash remittance (C’EE → C’OR) XX Freight return OPEX XX (customer → C‘EE / C’EE → C’OR) NI XX