accounting question?

Question

DR CR
Motor expenses 15,261
Rent 20,480
Bank 33,400
Drawings 29,400
Equity 132,000
Stock at 1 January 2002 38,280

(vii)Stock at 31 December 2002 was 36,200.

(viii)Depreciation is charged on office equipment at 20% per annum, using the reducing balance method. Depreciation is charged on motor vehicles at 10% per annum using the straight-line method. A full year’s depreciation is charged on all fixed assets held at the end of the financial year.

(ix)A bad debt of €3,736 is to be written off.

(x)A bad debt provision amounting to 3% of year-end trade receivables is to be established.

(xi)At 31 December 2002, salesmen’s salaries of €3,600 were due but unpaid.

(xii)At 31 December 2002, motor expenses of €1,261 had been paid in advance

i need 2 make an income statement , i just want to know how do u get the INVENTORY COST???????

Answer 1

I dont see any accounts or information you posted here that would influence any inventory accounts, unless "Stock" is inventory, then it would depend on what type of inventory system you use.

It looks like this is assuming just basics here, and that would simply be (beginning inventory + New inventory)-ending inventory

In other words, assume you have 600 in inventory at the beginning of the year, and 400 at the end, and you purchased 300 during the year. That would be 900-400, or 500 sold.

Answer 2

You should have taken care of that question last January, by either using LIFO OR FIFO accounting on inventory through the year. LIFO is cost based on the last item in is the first item sold; FIFO is first item in is first item sold-this gives you a running inventory. as the year progress you cost should go up as prices increase from the supplier. You need to set down with a CPA, and come up with a cost process to value your year ending stock at. With out that your a DUCK out of water. GOOD LUCK!