Stock valuation again Help

111111

the stock consists of food and drink and has been value on 30 april at 7,000.
this figure includes some frozen food that had cost 1,100 but will thrown out due to a problem with the freezer. although polar insurance company has agreed to pay for the full cost of the food, no money has been yet received. also included in the stock valuation figure are 20 bottles of wine. these had originally cost 9.50 each since they are not popular they are to be sold off at 7.00 per bottle.

Could you please please write me steps how to calculat the final figure to include in ETB

this stock valuation is something i still dont get.

Thank you

crispy

Hello,

Original Stock Value.......................7,000
Stock Written Off.........................(1,100)
Stock Written down to NRV................(50) 20 x (9.50-7.00)
Adjusted Stock Value.....................5,850

Journals in the ETB:

Dr Cost of Sales (P&L) 1,150
Cr Stock (Balance Sheet) 1,150

Stock should be valued at lower of cost and Net Realisable Value (NRV = Selling price less any costs to bring the item to a saleable condition).

amyjayne27

Hi 111111,

I am really struggling with stock vaulation aswell, I think I may have to phone my tutor and get him to explain it to me.

I dont understand how to caculate FIFO, LIFO and AVCO on a question, can anyone explain this to me?

Amy

PGM

crispy wrote: »

Hello,

Original Stock Value.......................7,000
Stock Written Off.........................(1,100)
Stock Written down to NRV................(50) 20 x (9.50-7.00)
Adjusted Stock Value.....................5,850

Journals in the ETB:

Dr Cost of Sales (P&L) 1,150
Cr Stock (Balance Sheet) 1,150

Stock should be valued at lower of cost and Net Realisable Value (NRV = Selling price less any costs to bring the item to a saleable condition).

I'd have thought Cr stock as you did, but then Dr a provison for insurance expected?

crispy

I think you are right. How about:-

Dr Insurance Debtor 1,100
Dr Cost of Sales 50
Cr Stock 1,150

Looks better

PGM

crispy wrote: »

I think you are right. How about:-

Dr Insurance Debtor 1,100
Dr Cost of Sales 50
Cr Stock 1,150

Looks better

Yeah I think that would be right.

111111

Hi Amy,

I difficult for me as well I understand the way but if I started to calculated by myself I get confused.