Deriving Value of Closing Stock from Information
Not what you're looking for?
See the attachment.
Swan Limited follows the practice of closing of its books on 31 March every year. The company was considering an offer to sell off the business at the beginning of 2014 but due to some differences the deal was not finalized and the company carried out stock taking on 10 March 2014. The value of stock on that date was $31,250 (cost). The company decided not to carry out stock taking on 31 March this year.
During the period from 11 March to 31 March 2014, the company sold inventory worth $21,600 which includes some goods costing $1,800 which were sold for $1,500 due to some defects. The company has a policy to make a mark-up of 25% on cost.
During this period it made a purchase of $14,600. One of company's old customers found some defects in some goods worth $1,100. The company accepted these goods back and returned full payment to the customer. The company had purchase returns of $600 during this period.
Goods with customers on sale or return basis were of $5,000 (Proforma invoice value). The goods had been sent on 9 March 2014. The customer had the right to return the goods within four weeks but it was known that one customer who had goods worth $2,000 had pledged them with bank.
The accountant of the company is new and seeks your help to arrive at stock as on 31 March 2014 from the above information.
Purchase this Solution
Solution Summary
This solution shows step-by-step calculations in an Excel file to determine the value of stock, cost of goods sold and goods on sale or return.
Solution Preview
See the attached Excel document.
Swan Limited
Computation of value of stock on 31 March 2014
Stock of goods as on 10 March 2001 $31,250
Add: Purchases $14,600
Less: Purchase returns $(600)
Less: Cost of ...
Purchase this Solution
Free BrainMass Quizzes
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.
Motivation
This tests some key elements of major motivation theories.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.