Production department personnel perform virtual processing in the system based on work orders summarized by different grades, and convert all purchased shearable grades into shearing raw materials. The marketing department issues a settlement form to the supplier based on the receipt of goods. The supplier also issues an invoice based on the amount on the settlement form. The marketing department staff enters the received invoice into the purchasing invoice system. After financial review, accounts payable are generated. Payment processing is performed in the Receipts and Payables module. When purchasing and warehousing, the material stored by the industrial company in Baosteel Resources is not considered to be cost-effective. This part of the material will also be distinguished when defining the product (that is, adding "S" to the material number to distinguish it). Therefore, the warehousing of this part of materials does not generate accounting entries. For the specific content of the secondary development required to achieve the above functions, please see the attachment

Accounting entries: When purchasing and receiving goods: Debit: Raw materials temporary estimate Credit: Accounts payable are temporarily estimated at When receiving the invoice: Debit: Raw material loan: Raw material provisional estimate or debit or credit: Accounts payable (difference between purchase invoice and purchase order) If there is an advance payment: Debit: Bank deposit credit: Prepaid account When making payment: Debit : Accounts payable Loan: Bank deposit 2. Please see the attachment for the scrap car purchase process. The purchase of scrap cars is based on the agreement signed with the Shanghai Motor Vehicle Recycling Service Center: all scrapped passenger cars and motorcycles in Shanghai and all scrapped in Chongming County The vehicles are all sent to Baosteel Resources for dismantling. However, due to the passive reception and the short operation time of the dismantling business, there is currently no corresponding purchase plan. The specific procurement process is described as follows: See the attachment for detailed process description: For the purchase of used vehicles, purchase orders are entered into the system in the form of one vehicle per order. When the vehicle is collected, the quality inspection department assigns the serial number of the vehicle (automatically assigned by the system). Serial number), the vehicle's serial number has 10 digits, the first 8 digits represent the year, month and serial number of the vehicle, and the last two digits are filled with 0s. For details of the development required to implement the above process, see the attachment . Accounting entries: When purchasing and receiving goods: Debit: Provisional estimate of raw materials Credit: Provisional estimate of accounts payable When receiving invoices: Debit: Credit for raw materials: Provisional estimate of raw materials Or borrow or credit: Accounts payable (purchase invoice and purchase order (Difference) If there is an advance payment: Debit: Bank deposit Loan: Prepayment When making payment: Debit: Accounts payable Loan: Bank deposit 3. Cooling block procurement process: Cooling block is a main business of Baosteel It is also relatively important. This part is now mainly managed by the rented Shengqiao warehouse. The main process is described as follows: See the attachment for detailed process description: Since the procurement processing of cooling blocks is managed in Shengqiao warehouse, it is not connected to the system now, so we use grading and weighing outside the system first, and then enter the system purchase order. , Receiving goods, the marketing department issues settlement documents according to the contract, and enters the received supplier invoices into the system for financial payment.

Accounting entries: When purchasing and receiving goods: Debit: Provisional estimate of raw materials Credit: Provisional estimate of accounts payable When receiving invoices: Debit: Credit for raw materials: Provisional estimate of raw materials Or borrow or credit: Accounts payable (Difference between purchase invoice and purchase order) If there is advance payment: Debit: Bank deposit Credit: Prepayment When making payment: Debit: Accounts payable Credit: Bank deposit 2. Basic settings of the production process: Involved in the production part The basic settings mainly include the following aspects: ● Products: The products in this part mainly refer to processed finished products. Specifically, for Baosteel’s business, they are sheared or cut scrap steel, disassembled auto parts, and processed products. cooling blocks, etc. See the coding scheme for specific definitions. ● BOM list of materials: mainly depends on the products to be processed by work orders, mainly including scrap steel processing and car disassembly BOM. ● Production technical data: mainly including work centers, process routes, and standard procedures. ● Warehouse information: warehouses and locations where all materials are stored. ● Main business departments: Production department and car dismantling workshop 1. Scrap steel processing Scrap steel processing is completed by placing production work orders and production tracking.

The specific process is shown in the figure: See the attached detailed process description: The scrap steel processing business is roughly divided into two situations, one is virtual processing for the conversion of materials, and the other is the processing of actual amounts of scrap steel. Part of the processing is handled by issuing a work order. Since the necessary information on the work order cannot be known in advance in actual business processing, the product name and quantity on the work order are based on the weighing order at a certain point in time. It will be summarized and then entered into the system work order for tracking and warehousing. When defining the bill of material, we define a bill of material with uncertain specific components, and then "add unestimated raw materials" to the components of the work order. This can reduce the amount of maintenance of the bill of material and can also be customized according to our needs. Track materials for work orders. In addition, there is one type of actual processing of scrap steel, that is, the cutting and processing of scrap steel, which is also processed using work orders and tracking. The specific method is to first print out the scale list in the measurement system, and then summarize it through the report. The summarized amount is entered into the system work order as the amount on the work order, and the product is tracked and stored according to the work order. Here you need to add a header field to the work order to distinguish different target products for cutting processing. It is selected when entering work orders and also serves as a mark for expense settlement.

Accounting entries: Debit: Production cost - Raw materials Loan: Raw materials Debit: Cutting raw materials Loan: Production costs - Transfer out 2. Scrap car dismantling: A. Complete dismantling: see attachment B, Partial dismantling : See the detailed process description in the attachment: There are two types of vehicle disassembly: complete vehicle disassembly and sporadic disassembly. The processing in the system is as follows: When the complete vehicle is disassembled, an empty BOM list will be created for all accessories first. i.e. only the parent product but no consuming components. When placing a work order, the accessories that can be disassembled are different depending on the car model, so the work orders for different car models are made into a template, and the template of the car model that is disassembled is imported. Then click the right button on the work order component page and select "Unforeseen Materials" to add the specific car model to be disassembled. Subsequent material tracking can assign a specific serial number (that is, specific to a vehicle of a certain model). During the tracking of finished products, auto parts are stored in the warehouse, and the serial number of the car will be generated at the same time, so that when querying, the parts can be traced from which car the parts were removed. The first 8 digits of the serial number of the accessory are consistent with the vehicle, and the last two digits are different from the vehicle, which is 01. For the convenience of inquiry, the system will also develop a comparison table, using the serial number as a clue to compare the quality inspection results of each vehicle with the disassembly results. An empty BOM table must also be created during sporadic disassembly, and the parts to be disassembled must be manually selected when placing a work order. However, there is no need to select a specific car model on the component page of the work order, and there is no need to assign a serial number. It is only for product tracking. That’s it. This allows you to add accessories without reducing the number of vehicles. Since the corresponding serial number must be added when the parts are put into storage and must be mapped to a certain vehicle, a field will be added to the header of the work order to enter the serial number of the vehicle so that it can be queried in the comparison table. The content required for development in the above business will be detailed in the attachment . Accounting entries: When dismantling and picking up the vehicle and putting it into storage: Debit: Production cost - Raw material loan: Inventory products - Raw material Debit: Finished goods - Variety loan: Production cost transferred out or borrowed or credited: Production cost difference is put into storage in parts Time: Borrow: Finished Products - Variety Loan: Production Cost Transfer Out

Or Borrow or Goods: Production Cost Difference Warehousing of Scrap Steel and Non-ferrous Metals (Miscellaneous): Borrow: Product - Loan for Scrap Steel : Production cost difference 3. Coolant processing: The coolant processing business is mainly carried out in Shengqiao. In the system, we only enter work orders based on the summarized documents and convert the original coolant grades A, B, and C into coolant A. ,B,C level. At the same time, part of the coolant processing is to process coolant C into shearing raw materials, which also needs to be realized through work orders. The specific process is shown in the figure: See the attachment. Accounting entries: Production costs - Raw materials Loan: Raw materials - Variety Borrow: Expenses: Provisional estimate payable 3. Sales process: Basic settings: ● Business partners: This part of the business refers to the business The partners are mainly customers. For the sales of scrap steel, they are mainly industrial companies, while the auto parts will be more diversified, and the other ones are the sales customers of some materials. The customer's coding is the same as the supplier's coding.

● Products: This part of the product mainly refers to processed scrap steel, consumable materials, auto parts, usable products (bought and sold, and waste pipes, waste plates and coils generated during the production process in the factory) that have been recycled, sorted or It is a steel product that has use value after processing), etc. ● Main business department: The main business department of this part of the business is the marketing department. 1. Scrap steel sales For the scrap steel sales, we first enter the sales contract into the sales contract by the marketing department, and then control the total amount according to the contract. This functionality will be implemented through the development of contracts. At the same time, this part basically does not have as strict price set management as procurement, but there is also an approval process for pricing. It is recommended that this part be carried out outside the system. The specific process for scrap steel sales is as follows: Sales to industries: See the attachment. Sales to other customers: See the attachment for detailed process description: The sales of scrap steel are currently roughly divided into two types based on different sales objects. One part is sold to Baosteel Industrial, and the other part is sold to Customers other than industry. For the part sold to industrial companies, we first enter the sales contract in the system according to the sales plan. However, since the measurement and quality inspection results of the industrial company's weighing room must be used as the standard, it is recommended that we first open a weighing application and weigh the weighing room in our system at this stage. After the industrial company's weighing order is returned, we can manually do it in the system. Compare and modify if there are any differences. Warehouse personnel then do shipment and shipment review in the system to confirm shipment. The marketing department issues settlement statements regularly, and the financial staff issues invoices and collects payments.

This part of the sales to other customers is based on our own scale measurement and product grading, but payment is required before delivery, so this part of the sales is entered into the sales contract in the system , open a shipping request based on the quantity required by the customer for this shipment, print it out and stamp it with financial confirmation, and then the customer takes this order to the production department for loading. Warehouse personnel open a weighing application form and weigh in the weighing room in the system. Warehouse personnel do shipping and shipment review in the system to confirm shipment. There are also some trade scrap steel, such as wire rods, which are placed in the warehouse of industrial companies. Baosteel Resources only purchases from industrial companies when they are sold, and the weighing only exceeds the scale of industrial companies, so the sales of this part are done manually in the system. Just enter the sales order. The materials stored by the industrial company in Baosteel Resources are not included in our inventory costs when the goods are shipped out of the warehouse. This part of the materials will also be distinguished during product definition. Therefore, the shipment of this part of materials only reduces the inventory and does not generate accounting entries. The process of leaving the warehouse also requires issuing a weighing application form, weighing in the weighing room, and then shipping and shipping review. Accounting Entries: Shipping Review: Debit: Cost of Sales Credit: Inventory Invoice: Debit: Accounts Receivable Credit: Sales Revenue and Taxes Collection: Debit: Accounts Receivable Credit: Bank Deposits Advance Receipts if Any: Debit: Advance Receipts Loan: Bank deposit 2. Auto parts sales This part of the sales process is basically direct sales and collection on the spot. The specific process in the system is as follows: See the attachment for detailed process description: The sales of vehicle accessories are generally direct sales and sold immediately after being dismantled, so we can first open a sample order outside the system, and after the customer confirms, then in the system Sales orders are entered in the system, and work orders are generated and sent to the car dismantling workshop, that is, the car is dismantled and disassembled. After the car dismantling workshop, the accessories must be put into storage first.