Hi all I am going round in circles with this client and it's been a long week and I'd like some outsider insight.
scenario - client has a contract to sell 100 kits at £10 each - raises a sales invoice for £1000.
the client confirms this is a non cancelleable contract and money is received for the full amount.
client buys 100 test kits at £5 each and has them delivered and pays for them.
At the year end only 50 of the test kits have so far been used up as the end user is delaying the testing (which they can do)
so - value of stock on the company balance sheet - is this assumed to have sold all 100 kits (even though technically they haven't been delivered)?
value of sales/ prepaid income - as the contract is non cancellable is all income counted or is 50% counted as income in advance?
off for a gin - thanks