Ive done the first two parts opening stock materials of the year and adding purchased during the year. This is where im stuck how do i get the closing stock of the year.
In front of me i have a trial balance for the year ending 31 march where i have to create a p& l.
what information do you have? Don't suppose that they've given the gross Profit have they?
The top part of the P&L is pretty self contained. Here's an example.
Sales
500,000
Opening Stock
50,000
Purchases
185,000
Purchase Returns
(37,000)
198,000
Closing Stock
44,000
154,000
Gross Profit
346,000
For closing stock it either needs to be supplied in the question or you need another variable in order to work back to it.
For example, does the question already have the closing stock figure in the balance sheet under current assets?
Sorry, difficult to answer without being able to see the question in its entirety.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I think they have made a printing error at the bottom where it says: stock of materials as 31 March 2007-07-30. I think thats supposed to be closing stock. as on the next page is the same scenario with a closing figure---well i think it's time to give my brain a rest
I think that there should have been a picture of the question pasted in your response but nothing has come up so still going a bit blind on this.
Ok, from the scenario that you've just described the stock figure that you are quoting is definitely closing, not opening stock.
To quote the question. Stock figure for 31st of March, trial balance date 31st of March (unsure what that -07-30 is at the other side of the date?).
So, you've got sales, closing stock and purchases.
There still has to be some more information in the question as unless you know what the gross profit is or the unit price is then I can't see how you can work back to opening stock in order to get the correct gross profit figre and if you can't get that then everything else will be out.
Don't suppose that there is anything anywhere in the question to indicate that there was no opening stock?
Which book is this coming from? Just thought that in the absence of being able to reproduce the question here there is the vaguest possibility I might have a copy sitting on one of my shelves.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Which book is this coming from? Just thought that in the absence of being able to reproduce the question here there is the vaguest possibility I might have a copy sitting on one of my shelves.
Looking at an earlier post I think she is using Kaplan.
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Hi everyone. I read this post this morning before I settled down to work through Kaplans practical bookkeeping kit (beginner/intermediate) and came across this question (question 71) myself this afternoon as I am currently revising my bookkeeping skills. I think the question does omit some detail, as it requests you to prepare the trading and profit and loss account for the year ending 31 March 2007, together with a balance sheet. I think the only way to complete this exercise would be to look at the answer section first and sneak a peek at were the opening and closing stock is shown in the answer! (thats what I did). I wont reveal the figures in case I have missed the point somewhere and working out the opening or closing stock is part of the problem.
How can you work this out without looking at the answer. I had a sneek peek at the answer too and still don't know where they got the closing stock figure.
Shaun- I was going to write out the whole question, but there was to much to write down.
When doing Trading Profit and Loss Accounts examples there is always a note under the trial balance with adjustments you have to do the closing stock figure is given here for you to put in the Trading profit and Loss Account and the balance sheet. More examples for you to do which are excellent practice are found in Business Accounts by David Cox an excellent study book for level 2 and 3. Kind Regards. Sue Ps the one you are doing in the Kaplan book it is a typo error the right figure is in the answer.
-- Edited by sally-anne on Wednesday 1st of June 2011 07:07:07 PM
worry not Ghislane, it is the same one that Susan is talking about.
June 16th (day after P2) I fully intend to start going back through all of the questions and answers in it to make sure that my feet stay firmly rooted in the nuts and bolts of our profession before I start on my advanced tax studies.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I am sure you will do really well with P2, your knowledge helping out on here with others is much appreciated. Acca does sound really interesting but me have got a long way to go yet lol. Kind regards. Sue
Yes it was Shaun, i took your advise and bought Business Accounts 2nd edition 2003 of ebay I'm sure there is a later version but this will do for now. and also the ACCA Paper F3 Study. I need all the help i can get.
