Last question for the night...

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:28AM in AAT student discussion
The task is stock adjustment.<BR><BR>The closing valuation is £63295 at cost price. Some items have had to be reduced after financial year end.<BR><BR>10 in stock, cost £30, normal selling price £45, reduced selling price £30<BR>10 in stock, cost £80, normal selling price £120, reduced selling price £60<BR><BR>Can anyone tell me what the stock valulation will now be after these adjustments. I know the ssap 9 rule but dont quite understand how to apply it to this question. Any explanations would be appreciated rather than just answers.<BR><BR>Thanks.

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Last question for the night...

    I think that it should be<BR><BR>63295-800 ( the purchase price of the goods now being sold at 60.00)+600.00(new price for goods which is less than purchase price)<BR><BR>You can ignore the first part as stock should be valued at either purchase cost or net realisable value ( they are the sameprice).<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Last question for the night...

    Hi MissL<BR><BR>SSAP 9- lower of cost or net realisable value.<BR><BR>First items cost=£30, NRV=£30 - NO adjustment required<BR><BR>Second items cost=£80, NRV=£60 - 10 items at £20 less - £200 adjustment required.<BR><BR>Adjusted stock valuation = £63,295-£200 = £63,095<BR><BR>Hope this helps, ask if you need further help.<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Last question for the night...

    scotty,<BR><BR>you got there moments before me, was going to say that only need to adj the second of the two stocks& only by £200.<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Last question for the night...

    Hi JJ. As long as we both agree!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Last question for the night...

    I think all three of us get the same answer. Just worded things differently<BR>

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