Calculating closing stock for a small craft business

Monsoon
Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
Manufacturing is not my strong point!

Client has a small business making craft things. It's a complete variety, so she has lots of miscellaneous fabric, beads, wood, random trinkets from charity shops etc, which she will eventually make into stock of some description.

Now, normally I would charge things like findings (misc consumables like clasps, clips, beads etc) to the P&L and not stocktake them, but would add to closing stock significant raw materials, and finished goods. Raw materials here are so random, it's hard to judge.

We're not talking mega-bucks here, but obviously the less that goes into closing stock the better.

Any thoughts?

Comments

  • T.C.
    T.C. Registered, Tutor Posts: 1,448
    I would simply ask the client for a sensible estimate. :huh:
  • Gem7321
    Gem7321 MAAT, AAT Licensed Accountant Posts: 1,438
    Agree with TC
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    What if the client is me and I'm clueless? :lol:

    I cross posted this in the MIP forum and someone hit me with the lower of cost and realisable value thing (d'oh!), and most of it on its own as raw materials is probably worthless, so that's my answer :)

    Thanks!

    Love from
    A buying miscellaneous junk to make things with Addict :lol:
  • ExcelAnt
    ExcelAnt Registered Posts: 80 ? ? ?
    This post just made my morning :)
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