I have the labor to cut the wood, the bags and boxes, and other expenses to cut the wood such as employee reimbursed mileage, equipment etc.
At the end of the period I have so many cords of wood.
Do I do a contra expense account and an asset account for the wood in inventory?
Cost of Production of Inventory 25,000 Inventory - Wood 25,000
My boss is suggesting something different but I want to get this straight. He is saying we have so many cords and wholesale value is $xxx so that becomes the basis of his inventory, but it doesn't sound right.
I assume once it is sold, I credit inventory, debit cost of goods sold, and debit cash & credit sales & tax, etc.
Thanks for looking at this.