Answer To Accounting Test Question SWO No. 1 On Stock Loss

November 27th, 2006 Comments off
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Answer to Accounting Test Question SWO No.1:

Answer to Question A:

(A ii) Computation of Adjusted Value of Wintner’s stock at 31 March 2006

 

$

$

Balance of stock

 

64,670

Add: goods purchased

2,830

 

Goods returns (100/125 x $180)

144

2,974

 

 

67,644

Less: Credit sales (100/125 x $2,120)

1,696

 

Cash sales (100/125 x$1,320)

1,056

 

Goods returned to supplier

450

3,202

Adjusted stock value

64,442

 

 

 

Answer A (ii)

Adjusted stock value

64,442

Less: reduce in stock value ($3,000-$2,500)

500

Revised stock value

63,942

From the above computation, the decrease in stock will affect the stock valuation by $500 which is ($3,000-$2,500)

Answer to Question B

Summer

Computation of Stock Loss :

 

$

Opening stock

68,200

Add: Purchases

184,300

Goods available for sale

$252,500

Less: Cost of Sales

189,600

Closing Stock

$62,900

Less: Physical stock value

12,600

Stock loss

$50,300

Add: Damage to premises

4,600

Total Insurance Claim

$54,900

The total insurance claim is $50,300+$4,600 = $54,900

Working details for Cost of Sales:

Since Selling price is 1331/3%

Therefore Cost of sales = 100/1331/3 x $252,800 =$189,600

Or alternative working:

Mark-up =331/3% =1/3

Margin =1/4

Margin = Gross Profit/Sales

=1/4 =Gross Profit/252,800

Gross profit = $63,200

Cost of sales = Sales – Gross Profit =$252,800-$63,200 = $ 189,600

 

 

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Financial Accounting

 
 

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