Journals

7xdave

I have been given a question and I am having a senior moment and have gone toally blank and need help:
"no entries have yet been made for closing inventory as at 31st March 20X7. It has been valued at sales prices of £16875. The sale price of goods is always 35% higher than the cost of the goods."

What is the journal entries I need to do?

kelsmick

So you would need to work out the value of inventory so if its been marked up 35% of purchase prices it would be £16,875 / 135 * 100 = £12,500 then you would do you journal entries to for the p&l & balance sheet.

JoshJ1992

Journal entries would be
Debit - statement of financial position £12,500
Credit - statement of profit and loss £12,500

Hope that helps.

rakeshsuwal

Dr Closing inventories (spf) 12500
Cr Closing inventories (spl) 12500

7xdave

Thanks all