Opening Stock + Closing Stock

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:32AM in AAT student discussion
Hi, Can someone please tell me how to calculate opening & closing stock. :shock:
Any help would be great.

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Opening Stock + Closing Stock

    Hi Theaky

    don't know what you mean completely by your question, but in the aat papers, one or both of these figures will be given to you - unless you are looking at incomplete records - which is a bit different.

    in industry, the closing stock of one year will be the opening stock of the next year - calculated by the stock count/check which you will have done at the end of the financial year. When you are calculating the accounts for a year end - you would count the stock at cost or net realisable value. this listing and its value will be your closing stock figure for the year.

    Put this through with your opening stock, purchases and you will be able to calculate cost of sales for the year in question.

    does that answer your question? hope that I have explained it clearly!

    Chris :)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Opening Stock + Closing Stock

    Hi,
    Thanks for your prompt reply. It is an incomplete record that I have. The value of stock was unknown, due to it being a new business.
    The cash from sales is banked at the end of the day.
    Dr Cash Account £89,750
    Closing balance 1305

    Cr Payments to creditors £59,400
    Wages 8105
    General expenses 7550
    Drawings 11,000
    Fixtures 5,000

    Extra cash payments General expenses £2,150,
    Wages £1,900
    Outstanding balances
    Trade Creditors £9,320 General Expenses £780
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Opening Stock + Closing Stock

    hi,

    have done some workings on this on paper with the stuff which you have detailed - and is looking a bit suspect, are you sure you have all the details?

    I know it's late, but........can you tell me which exercise you are working on - and in which book? will see if I have it?

    Ruby


  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Opening Stock + Closing Stock

    also, just had a thought -

    think this question should detail whether sales are detailed with a gross profit margin of x%?

    or a cost mark up %?

    think this might be the missing factor?

    Ruby
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Opening Stock + Closing Stock

    Hi,
    Sorry to be such a pain with this. The paper is a 2002 past exam. The value of stock was unknown but the profit margin is 1/3 on all sales. (Sorry probably should have put that in :oops: )
    The question is; Prepare the cash account, showing clearly the total sales.
    Obviously as well. They are asking for the gross profit figure and the closing stock figure.

    Just checked my initial entry with the paper, those are all the details I have.
    I have emailed my tutor as well about this. Can't believe the exam is on Wed. This stuff just seems so basic, and I'm struggling.
    Trying to get my head around my weaker areas.

    Lou
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Opening Stock + Closing Stock

    am just going to work on this paper - do they detail how much they put in to the business at the start? sure they must detail that too?

    this sounds like net asset movement.work this out, as you should have a detail of capital at the start of the year, and then these figs at the end, re closing balances on assets and liabilities.

    the formula for this is

    change in net assets is : capital introduced + profit - drawings.

    you can then juggle with these figures to work out the profit - which will be net in the balance sheet.

    also, in your t a/cs you won't have any opening balances, so put in the entries which you have.

    then balance the t a.cs down.

    the balancing figures within these accounts will be sales and purchases.

    cogs sold will be the sales balancing figure (which I believe in this instance will be the 100% figure. divide this figure by 3 to calculate in effect your gross profit figure. you can the calculate the cogs figure(the 2/3 of sales and then the closing stock.


    If you want me to do the figs for you - i will, but give me your email address and i'll send the doc over.

    how's that sound ? does it start to make sense now?

    Ruby
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Opening Stock + Closing Stock

    My email address is louise@alternative-studios.com.
    They only give the bank summary. No capital at the start of the year.

    I have just had to read what you put 4 times for it to make sense. I'm so used to finding the gross profit figure on the P & L a/c format. My brain is just fried.
    The figure I have for sales is, £99,255 ?

    Thanks for your help.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Opening Stock + Closing Stock

    i have a different figure than that - i'll email you direct to your address!

    Ruby :)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Opening Stock + Closing Stock

    :lol:
    Thanks, I'm not surprised.

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