a. You need to include a value for work in progress and stock in your accounts. It is usually stated at cost. However, if you have to sell stock at a loss, you must state your stock at the net selling value after deducting all the costs that need to be incurred to sell the stock. Include the value on the face of the balance sheet under current assets.
b. Include your new stock value in your income statement. This means your gross profit will be sales less direct expenses add opening stock less closing stock.
c. Your balance sheet will balance because you have adjusted stock and accumulated profit in the balance sheet by the same amount. |