Assume I have a company A and I need to deliver 10000 pieces of products that I manufacture within the specified delivery time. Since I estimate the production capacity of my plant to 7000 pieces within the delivery time, I outsource the remaining 3000 pieces to company B. Now, does the count of 3000 add to the “Stocks in trade” in the ‘P&L’ statement of my company A?
Basically I am trying to understand what ‘Goods in trade’ in the P&L statement refers to.