Help needed - ETB

System

Hi there

Can anyone help me with this query please - I am doing an ETB for the Southtown Supplies exercise in the Osbourne workbook - the bit I am stuck on is:

"Stock was valued at £60,000; this figure excludes goods which were damaged by a burst water pipe and have been scrapped (no sale proceeds); Wyvern Insurance has agreed to cover the loss of £500 incurred in writing of the goods".

What entries do I make in the adjustments column? Is it:
Cr - Stock £500
Dr - Insurance Claims £500 - OR have I got this totally wrong?

Would be really grateful if someone could explain please?

System

Re:Help needed - ETB

Hi

I don't have the Osborne book (I use FTC), but my tutor at college emailed all the answers from the Osbourne book, to all of her students.

I have found the answer for the ETB for Southtown Supplies and it has been calculated as:

CR purchases £500
DR Insurance claim £500

They calculated the balance for purchases (P&L) at £279,500
and the Insurance claim (Balance sheet) £500

Hope this helps

Carole

If you need any more answers let me know

System

Re:Help needed - ETB

Sorry..

I also meant to tell you that the closing stock figure has not been adjusted and remains at £60,000.

I guess this is because (as you stated) they had already excluded the damaged stock from this figure and as such, had already adjusted for it, by not counting it in the final sock count.

Hope this helps

Carole

System

Re:Help needed - ETB

Thats great, thanks so much for your help.

Would it be possible for you to e-mail the answers your tutor gave you please? Unfortunately our tutor isnt that helpful!

If so i will forward my e-mail address.

Thanks again!

System

Re:Help needed - ETB

No problem.

Let me have your email address and I shall email all the answers to you.

Good luck

Carole