Cash Sales & Installment Sales for Memorial Park

Some amendments correction:

Subject: Cash Sales & Installment Sales
To: Holy GardensGroup <holygardens.group@gmail.com>

COMPUTATION OF COGS

 Cost of goods sold is arrived at by dividing UDC + cost of land  by saleable area (usually 60% to 70%)  UDC is the projected total amount of development to be incurred during the entire development of the property into a memorial park.  It is set up based on the signed computation of the Project Engineer.

Thus:

Real Estate Held for Sale (REH)

Cost of Land                         xxx

Total cost to develop            xxx

Unexpected development cost:                                    xxxx

Subsequent sale of plots are credits to REH;  forfeitures are debits to REH. The supporting documents to REH are:

         1.  UDC computation

         2.  Master list with all the additions and subtractions

         Dual (or even triple control of master lists are instituted:

         1 copy from Sales Admin Assistant (Records Assistant)  based on documents

         1 copy of Treasury Assistant  (based on SBU records updating)

         1 copy at each SBU based on PPA, and abstract

          COGS  =      Cost of 

CASH SALES

Sales which are paid in full, in spot or for a period of 30 and 60 days from the date of the reservation depending on the agreement with the customer.

                    Cash                                xxx

                              PC                                    xxx                                                            VAT 
                                   

                              (COGS)            REHS 

                              Sales                                xxx
                     COGS                                Sales

                              Gross Profit                      xxx

CASH SALES JOINT VENTURE

                    Sales

                 _-_ME__

                Net Sale

                JV Partner Share

               Our share

               Less: COGS

INSTALLMENT SALES

These are sale of lots on credit. The clients/customers paid a certain portion of the contract price.  The balance is payable within one (1) year or five (5) years at the discretion of the buyer.  This is evidenced by a notarized Contract to Sell/Offer to Purchase, duly signed by the buyer, agent, marketing specialist, accounting, Chief Operating Officer and Managing Director.

Net Sales – Gross Sales less sales discounts and other non plot prices

          Cash (D/P)              xxx

          ICR                          xxx

                         Deferred Income  (Sale - COGS)    

                        CAPF (AP)                               xxx

                PC     (AP)                               xxx

                 VAT    (AP)                              xxx

Since there is a debit to Sale at DI side there is a Cr to COGS at REHS

               COGS               REHS            xxxx

                    

                   

Installment Sale (Owned)

            Sale

      _ME_

Net Sale

       _COGS_

Deferred Income

Accounting for installment sale

Down Payment

          Cash

          

                    PC 

                    CAPF

                    Deferred Income               xxx

AR              VAT (for one year)

Our DP includes:

      1.  The down payment for the lot price

      2.  Perpetual Care

The VAT is a receivable for one year (without interest)

Where deferred income is Net Sale - COGS (for the entire cost of land before sharing)

MONTHLY AMORTIZATION

          Cash                                          xxx

                    Realized Gross Profit                   xxx

                    Interest Income                            xxx

         The DI is a control account, and all subtractions from this coming from RGP should be properly noted.

Installment

RGP = Installment x Fraction of Installment x 80%) Deferred Income

                    1/36 (3 years to pay) x 80% of the deferred income

                    1/48 (4 years to pay)                   "

                    1/60(5 years to pay)                    "

Forfeiture

The sale transaction is reversed:

Sale ( Deferred Income and RGP)                              xxx

COGS                   REHS
          COGS         Sale         xxxx
          ICR                              xxxx

          No transactions are made with regards to VAT since they have been paid to the govt, PC is likewise deposited to trusteee bank

         

          

                    Cash        (50%of principal payments)               xxx

                    Other Income  (Interest income + penalties       xxx                                                     

 This is excluded from further JV sharing since the JV all ready got its share and the inventory is returned for further sale.