**Write-off of goods at the cost of each unit.**

Goods accounted for at __purchase cost__ can be written off using one of six methods (see lecture questions). The use of one of these methods should be spelled out in the accounting policy of the organization and carried out throughout the reporting year. The most time-consuming method is the write-off of goods at the cost of each unit. The essence of the method: each credited unit or batch is accounted for as an independent nomenclature item and written off at the cost at which it was acquired.

**Example 1**

At the beginning of the day, the warehouse of the wholesale base includes:

1. Spaghetti (batch 1) – 50 kg at a price of 10 rubles / kg.

2. Spaghetti (batch 2) – 250 kg at a price of 7 rubles / kg.

3. Spaghetti (batch 3) – 300 kg at a price of 12 rubles / kg.

During the day, the warehouse received spaghetti – 400 kg at a price __of 10 rubles per kg__ . According to the storekeeper’s report, the following products were released from the warehouse during the day:

– from 1 batch 100 kg; – from 2 parties 200 kg; – from 3 parties 50 kg.

**Statement of quantitative and total accounting of goods**

Name of product | Unit rev. | Price per unit, rub. | Balance at the beginning of the day | Turnover per day | Balance at the end of the day | |||||

coming | consumption | |||||||||

Qty | Sum | Qty | Sum | Qty | Sum | Qty | Sum | |||

one. | 2. | 3. | 4. | 5. | 6. | 7. | eight. | nine. | ten. | eleven. |

Spaghetti, par. one | Kg | 10.00 | ||||||||

Spaghetti, par. 2 | Kg | 7.00 | – | – | ||||||

Spaghetti, par. 3 | Kg | 12.00 | – | – | ||||||

Total | X | X | X | X | X | X |

The cost of goods sold amounted to 3000 rubles. The commodity balance according to warehouse accounting amounted to 6850 rubles.

D 90.2 K 41 1400 =

D 90.2 K 41 600 = Postings are made in accounting.

D 90.2 K 41 1000 = /

The use of this method leads to an increase in the positions of the item in the accounting department, as well as to the complication of the organization of warehouse accounting. In practice, simplified methods are used to evaluate outgoing goods, in which the sequence of goods released by the storekeeper is ignored.

**Write-offs based on the weighted average, moving average, and weighted average with adjustment at the end of the month.**

One way to reduce the complexity of calculations when writing off batches of the same product purchased at different prices is to calculate the average cost, which has two varieties.

__The formula for calculating the weighted average__ cost of goods.

Wed s/s 1 unit u003d (Value of the balance of goods at the beginning of the month + Cost of goods received per month) : (Quantity of goods at the beginning of the month + quantity of goods received per month).

**Example 2**

The balance of goods at the beginning of the month amounted to 200 units. total cost of 2000 rubles. During the month, 3 more batches of the same product were received:

1. 100 units total cost of 1100 rubles. (Sold 150 units).

2. 150 units total cost of 1800 rubles.

3. 150 units total cost of 2100 rubles. (Sold 200 units).

In total, 350 units were sold in a month. goods.

Wed s/s 1 unit u003d (2000 + 1100 + 1800 + 2100) : 200 + 100 + 150 + 150 u003d 7000 rubles. : 600 units = 11.67 rubles / unit

Thus, the cost of goods sold was:

350 units * RUB 11.67/unit = **4084.5 rubles.**

D 90.2 K 41 4084.50 =

This method has become widespread in management programs (1C: Trade Management, 1C: Integrated Automation, 1C: ERP, etc.).

The disadvantage of this method is that during the month the accountant and managers know only the quantitative values of current write-offs, which makes it difficult to analyze the profitability of sales.

__The formula for calculating the moving average__ cost of goods.

Wed s/s 1 unit = (∑Initial Rest + ∑ Incoming – ∑ Previous Retirement) : (Number of Initial Rest + No. Incoming – No. Previous Retirement).

Based on the data **of example 2** , let’s calculate the value of the average moving cost of goods sold:

1. Cost of the first sale = (2000 + 1100) : (200 + 100) = 3100: 300 = 10.33 rubles/unit.

RUB 10.33/unit * **150** units = **1550** rubles.

D 90.2 K 41 1550 rub.

2. Cost of the second sale = (2000 + 1100 + 1800 + 2100 – **1550** ): 200 + 100 + 150 + 150 – **150** = 5450 rubles. : 450 units = 12.11 rubles / unit

RUB 12.22/unit * 200 units = 2422.22 rubles.

D 90.2 K 41 2422.22 rubles.

Total written off for the month: 1550 rubles. + 2422.22 = **3972.22 rubles.**

The disadvantage of this method is the cumbersomeness in calculations, which limits its use even in modern accounting programs.

To date, the weighted average method with adjustment based on the results of the month has become widespread. The essence of this method is that the weighted average is determined at the end of each write-off (and not at the end of the month). At the same time, previous write-offs are not taken into account, therefore, based on the results of the month, __deviations are determined according to the formula:__ “Adjustment amount = Total weighted average for the month – Amounts of all write-offs during the month”. Deviations identified at the end of the month are written off to the cost of sales of the relevant goods.

Based on the data **of example 2** , let’s calculate the weighted average for both write-offs with subsequent identification of deviations:

1. Cost of the first sale = (2000 + 1100) : (200 + 100) = 3100: 300 = 10.33 rubles/unit.

RUB 10.33/unit * **150 units** = **1550 rubles.**

D 90.2 K 41 1550 rub.

2. Cost of the second sale = (2000 + 1100 + 1800 + 2100) : 200 + 100 + 150 + 150 = 7000 rubles. : 600 units = 11.67 rubles / unit

RUB 11.67/unit *** 200 units = 2334 rub** .

D 90.2 K 41 2334 rub.

3. Adjustment based on the results of the month:

Wed s/s 1 unit for the whole month = (2000 + 1100 + 1800 + 2100): 200 + 100 + 150 + 150 = 7000 rubles. : 600 units = 11.67 rubles / unit

Adjustment amount u003d 11.67 * (150 units + 200 units) – (1550 + 2334) **u003d + 200.5 rubles** . At the end of the month, an additional (corrective) entry will be automatically made for this product:

D 90.2 K RUB 41,200.5

This method has become widespread in accounting programs, incl. in “1C: Enterprise Accounting”.

**Write-off according to the FIFO method (rolling and weighted estimates).**

The FIFO method is an alternative to the average cost method. FIFO with a sliding estimate assumes that goods are written off in the order in which they arrived at the enterprise – at the prices of the corresponding (disposal) lots. It does not matter which batch the storekeeper actually released the goods from.

Based on the data **of example 2** , let’s evaluate the sold goods __using the moving FIFO method__ . For this:

1. Determine the price of 1 unit. goods in each batch:

– initial balance = 2000 rubles. / 200 units u003d 10 rubles / unit.

– the first batch = 1100 rubles. / 100 rub. u003d 11 rubles / unit.

– the second batch = 1800 rubles. / 150 units u003d 12 rubles / unit.

– third party = 2100 rubles. / 150 units = 14 rubles / unit

In practice, prices do not need to be calculated, since they become known from the moment the goods arrive at the enterprise.

2. Determine the cost of the first sale = 150 units. * 10 rub./unit. = 1500 rubles / unit *(Because the opening balance is the first batch available, the write-offs were made at the prices of the opening balance).*

D 90.2 K 41 1500 rub.

Cost of 1 unit in a batch u003d 1500 / 150 u003d ** 10 rubles / unit** .

3. Determine the cost of the second sale = **50 units.** * 10 rub./unit. + **100 units** * 11 rub./unit. + **50 units** * 12 rub./unit. = 2200 rubles.

D 90.2 K 41 2200 rub.

Cost of 1 unit in a batch u003d 2200 / 200 u003d ** 11 rubles / unit** .

*(To estimate 200 units sold, it was necessary to write off the entire opening balance of 50 units, fully use the first batch of 100 units, and partially use the second batch of 50 units. The prices of the corresponding batches were applied).*

Total debited per month = 1500 + 2200 = **3700 rubles** .

This method has become widespread in accounting programs, in particular, in “1C: Enterprise Accounting”. Disadvantages of the method:

– requires more computing resources compared to the weighted FIFO estimate;

– the cost of sales is underestimated, since the first batches are written off, which, due to inflation, are cheaper than later batches;

– since the cost of a unit of goods in batches differs [10 and 11 rubles / unit], managers and departments that have completed the first sale will receive greater profitability, and those that have completed the second sale will receive less.

__The FIFO weighted goods valuation method__ involves the use of the following formula:

∑ write-offs = ∑ initial balance + ∑ receipts – ∑ final balance.

Based on the data **of example 2** , let’s evaluate the sold goods __using the weighted FIFO method__ .

1. Find the sum of the final balance in physical units = 200 units. + 100 units + 150 units + 150 units – (150 units + 200 units) = 600 units – 350 units = **250 units**

2. Estimate the final balance in rubles. Since, under FIFO, write-offs are carried out at the prices of the initial lots, the final balance is estimated at the prices of the last lots by the time of receipt = **150 units.** * 14 rubles/unit + **100 units** * 12 rub./unit. = 3300 rubles.

3. ∑ write-offs = 2000 rubles. + (1100 + 1800 + 2100) – 3300 rubles. = **3700 rubles.**

D 90.2 K 41 3700 rub.

Thus, FIFO rolling and FIFO weighted estimates lead to the same results at the end of the month (3,700 rubles), however, a weighted FIFO estimate allows you to determine the cost of a unit of goods common to all parties: 3,700 rubles. / 350 units = 10.57 rubles / unit (instead of 10 and 11 rubles / unit).

The FIFO weighted assessment method is used in “1C: Trade Management (rev. 11)”, “1C: Integrated Automation 2.0”, “1C: ERP 2.0” and other management programs.

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