Repairing of inventory

Khurram Shahzad (Accountant) (40 Points)

07 September 2016  

Hi Guy's

I'm a student of CA and also doing a job as an accountant as well. I need some information regarding inventory repairing . let me explain my question with the help of an example.

Suppose XYZ Company engaged in the business of Cell Phone and Electronics Product .Company Purchased inventory amounting Rs. 200,000 (8 Cell phones) for reselling . Company Paid Rs. 5,000 for repairing of these phones . My question is :

1- Do I need to record Rs. 5,000 as an expense ?

2- Do I need to record Cost of Good Sold ?

An early response would be highly appreciated

Thanks

Khurram