Sky Ltd. keeps no stock records but a physical inventory of stock is made at the end of each
quarter and the valuation is taken at cost. The company’s year ends on 31st March, 2018
and their accounts have been prepared to that date. The stock valuation taken on 31st
March, 2018 was however, misleading and you have been advised to value the closing
stocks as on 31st March, 2018 with the stock figure as on 31st December, 2017 and some
other information is available to you:
(i) The cost of stock on 31st December, 2017 as shown by the inventory sheet was Rs.
80,000.
(ii) On 31st December, stock sheet showed the following discrepancies:
(a) A page total of Rs. 5,000 had been carried to summary sheet as Rs. 6,000.
(b) The total of a page had been undercast by Rs. 200.
(iii) Invoice of purchases entered in the Purchase Book during the quarter from January
to March, 2018 totalled Rs. 70,000. Out of this Rs. 3,000 related to goods received
prior to 31st December, 2017. Invoices entered in April 2018 relating to goods
received in March, 2018 totaled Rs. 4,000.
(iv) Sales invoiced to customers totaled Rs. 90,000 from January to March, 2018. Of this
Rs. 5,000 related to goods dispatched before 31st December, 2017. Goods
dispatched to customers before 31st March, 2018 but invoiced in April, 2018 totaled
Rs. 4,000.
(v) During the final quarter, credit notes at invoiced value of Rs. 1,000 had been issued
to customers in respect of goods returned during that period. The gross margin
earned by the company is 25% of cost.
You are required to prepare a statement showing the amount of stock at cost as on
31st March, 2018.
Answers
Answer:
Sky Ltd. keeps no stock records but a physical inventory of stock is made at the end of each
quarter and the valuation is taken at cost. The company’s year ends on 31st March, 2018
and their accounts have been prepared to that date. The stock valuation taken on 31st
March, 2018 was however, misleading and you have been advised to value the closing
stocks as on 31st March, 2018 with the stock figure as on 31st December, 2017 and some
other information is available to you:
(i) The cost of stock on 31st December, 2017 as shown by the inventory sheet was Rs.
80,000.
(ii) On 31st December, stock sheet showed the following discrepancies:
(a) A page total of Rs. 5,000 had been carried to summary sheet as Rs. 6,000.
(b) The total of a page had been undercast by Rs. 200.
(iii) Invoice of purchases entered in the Purchase Book during the quarter from January
to March, 2018 totalled Rs. 70,000. Out of this Rs. 3,000 related to goods received
prior to 31st December, 2017. Invoices entered in April 2018 relating to goods
received in March, 2018 totaled Rs. 4,000.
(iv) Sales invoiced to customers totaled Rs. 90,000 from January to March, 2018. Of this
Rs. 5,000 related to goods dispatched before 31st December, 2017. Goods
dispatched to customers before 31st March, 2018 but invoiced in April, 2018 totaled
Rs. 4,000.
(v) During the final quarter, credit notes at invoiced value of Rs. 1,000 had been issued
to customers in respect of goods returned during that period. The gross margin
earned by the company is 25% of cost.
You are required to prepare a statement showing the amount of stock at cost as on
31st March, 2018.this is the example of how to write a letter
Answer:
80000-1000+200+(70000-3000+4000)=150200
cogs=90000-5000+4000-1000-71600(gp=70400
c/s=220600