23 November 2008
a company manufacturing medicines. and to sell their products they give samples of those product to doctors.so how the cost of samples to be accounted. for eg:
the opening balance is as follows: Goods for sale=Rs. 50 Samples= Rs.10 Cost of goods produced: For sale= Rs.150 Samples= Rs.20
Sales(Rs. 175 cost)= Rs. 250
Closing Stock: For sale= Rs.25 Samples= Rs. 15 here Rs.15 worth samples were given to doctors and my doubt is whether we should disclose the samples given to doctors in the credit side of Trading A/c or not.
24 November 2008
The cost of sample distributed is not an item of Trading Account. The same should directly be charged as a Sales Promotion Expenses and its the Raw Material and Manufacturing cost allocable to the samples be directly booked to the aforesaid head of account.
CAclubindia
