THE BALANCE SHEET POCKET BOOK phần 9 potx

PROFIT AND LOSS ACCOUNT

COST OF GOODS SOLD

● Assume the company has a Finished Goods stock at the start of the period of £260k

● During the period £920k of completed products are transferred from production

● At the end of the period, if nothing had been sold, there would be £1,180k stock

of Finished Goods

● However, when the closing stock is valued there is found to be only £180k in stock

● Hence, by difference, the value of stock shipped from Finished Goods,

ie: the Cost of Goods Sold - must be £1,000k

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