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Hi,
Would you mind helping me to understand the accounting treatment for this real life example please?
My friend’s daughter is starting a false eyelash business. It involves selling the false eyelashes, and fitting them. I understand that the eyelashes are not sold independently to the fitting of them.
Therefore, is the revenue the combined price of both? There’s no need to separate them into their own components, is there?
Also, how would one go about valuing inventory? Is the net realisable value calculated using the revenue which includes the service element?
I hope I’ve explained my question properly!
Thanks.
Hi,
I’m happy to deal with anything related to the exam but I’m not comfortable dealing with something like the above in case the answer is misinterpreted in some form.
I’d recommend that your friend’s daughter speak to a local accountancy firm who will be more than happy to help her prepare the accounts and deal with the tax too.
I wish her every success in her new venture.
Thanks
Thanks for your reply. I understand. For the record, I had no intention of helping her, or relaying your response. I don’t know her daughter, and the mother is just a colleague I was chatting to briefly. I was just curious for my own sake! But it’s ok, I realize it’s not for an exam, so it’s not fair to expect you to answer it. Thanks again.
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