Preparation of financial statements

Closing stock is more than opening stock by 160000, so if you see in cost of purchase 1.6L is added and changes in inventory next 1.6L is negative, so net effect is 4.2 lakhs only

R Yashwanth Kumar

CA Final

★ 87K+

04-Oct-24 19:00

here in trial balance they hv given closing stock as 180,000.when the adjustment says closing stock is 160,000 more then opening stock is taken to be 20,000. SO since closing stock is given in trial balance, purchases of finished goods should be shown as purchases(in trial balnce) plus closing stock. so 180,000 shld be added to purchases right why 160,000.

Thread Starter

Niveta Rajkumar

CA Inter

★ 6K+

04-Oct-24 20:04

Can someone tell the reason why

Thread Starter

Niveta Rajkumar

CA Inter

★ 6K+

06-Oct-24 18:06

Closing stock is given in Trial balance - Means the purchases given in trial balance is adjusted purchases. Adjusted Purchase = Opening Stock + Purchases - Closing Stock. Adjusted purchase + Closing stock - Opening Stock = Purchases 4,20,000 +(Closing stock - Opening Stock ) = Purchases. Closing stock is higher than opening stock by 160,000 so 420000 +160000 = Purchases.

CA Suraj Lakhotia

Admin

08-Oct-24 11:32

thank you sir !!!

Thread Starter

Niveta Rajkumar

CA Inter

★ 6K+

08-Oct-24 18:12