during the period 1 oct to 10 october2008 the stock figure was $38 900
sales were $7800,the company makes a gross profit of30% on cost
(ii)purchases were$4000
(iii)returns in wards were$1950
(iv)one stock sheet had been overadded by$800while the other had been under-added by $560
goods costing $400 on sale/return basis had been included in stock figure
vi)inclu1ded in the stock,were goods costing $1200,the goods can now be sold at half the normal priceAFTER restorationwork costing
$200
vii)goods received on on a sale/return basishqad been included in stock at the amount payable of $600if retained.nodecision to retain the goods had been made
viii)a stock sheet totalling $128 had been transferred to the summary sheet as $182.
QUESTION:
CALCLATE THE VALUE OF STOCK AS AT 30 SEPTEMBER 2008
To calculate the value of the stock as of 30 September 2008, we need to consider the given information about purchases, returns, adjustments, and restoration work. Let's break down the calculation step by step:
1. Start with the stock figure as of 1 October 2008: $38,900.
2. Deduct the cost of goods sold (sales) from 1 October to 10 October 2008: $7,800.
Stock figure as of 10 October 2008 = Stock figure as of 1 October 2008 - Cost of goods sold
Stock figure as of 10 October 2008 = $38,900 - $7,800
Stock figure as of 10 October 2008 = $31,100
3. Add the purchases made during the period: $4,000.
Stock figure as of 10 October 2008 (after purchases) = Stock figure as of 10 October 2008 + Purchases
Stock figure as of 10 October 2008 (after purchases) = $31,100 + $4,000
Stock figure as of 10 October 2008 (after purchases) = $35,100
4. Deduct the returns made during the period: $1,950.
Stock figure as of 10 October 2008 (after returns) = Stock figure as of 10 October 2008 (after purchases) - Returns
Stock figure as of 10 October 2008 (after returns) = $35,100 - $1,950
Stock figure as of 10 October 2008 (after returns) = $33,150
5. Adjust for stock sheet errors:
- Overadded stock sheet: Deduct $800.
- Under-added stock sheet: Add $560.
Stock figure as of 10 October 2008 (after adjustments) = Stock figure as of 10 October 2008 (after returns) - Overadded stock sheet + Under-added stock sheet
Stock figure as of 10 October 2008 (after adjustments) = $33,150 - $800 + $560
Stock figure as of 10 October 2008 (after adjustments) = $32,910
6. Deduct the cost of goods included in stock but sold/returned: $400.
Stock figure as of 10 October 2008 (after adjusting for sold/returned goods) = Stock figure as of 10 October 2008 (after adjustments) - Cost of goods included in stock but sold/returned
Stock figure as of 10 October 2008 (after adjusting for sold/returned goods) = $32,910 - $400
Stock figure as of 10 October 2008 (after adjusting for sold/returned goods) = $32,510
7. Calculate the value of goods included in stock now available to be sold at half the normal price:
- Cost of goods included in stock: $1,200
- Restoration work cost: $200
- Selling price after restoration work: Half of the normal price = 50% of the normal price
Adjusted value of goods included in stock now available to be sold = Cost of goods included in stock + Restoration work cost - (50% * Cost of goods included in stock)
Adjusted value of goods included in stock now available to be sold = $1,200 + $200 - (0.5 * $1,200)
Adjusted value of goods included in stock now available to be sold = $1,200 + $200 - $600
Adjusted value of goods included in stock now available to be sold = $800
8. Add the value of goods received but not yet decided to retain:
- Amount payable: $600
Stock figure as of 10 October 2008 (including goods not decided to retain) = Stock figure as of 10 October 2008 (after adjusting for sold/returned goods) + Value of goods received but not yet decided to retain
Stock figure as of 10 October 2008 (including goods not decided to retain) = $32,510 + $600
Stock figure as of 10 October 2008 (including goods not decided to retain) = $33,110
9. Adjust for the stock sheet error: Deduct $128 (transferred as $182).
Stock figure as of 10 October 2008 (after adjusting for stock sheet error) = Stock figure as of 10 October 2008 (including goods not decided to retain) - Stock sheet error
Stock figure as of 10 October 2008 (after adjusting for stock sheet error) = $33,110 - $128
Stock figure as of 10 October 2008 (after adjusting for stock sheet error) = $32,982
Therefore, the value of the stock as at 30 September 2008 is $32,982.