Stock provision

P+L/Bal Sheet mismatch due to stock provision driving me mad!!

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At year end 2020 we had £1m stock less £50k provision showing in both P+L and BS.

At year end obviously all P+L figures reset to zero and reserves updated. But when doing Jan accounts I'm left with a £50k mismatch between stock valuation on P+L and that on the BS due to the provision having reset itself to zero on P+L but remaining at £50k on BS.

This is a really dumb question but what on earth am I doing wrong!!??  Basic stuff I'm sure but it's going round and round in my head without solving itself!

 

Replies (14)

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Psycho
By Wilson Philips
15th Mar 2021 20:30

Difficult to help without seeing your actual accounting entries (and/or, as Paul suggests, TB) but I don’t understand the issue.

For example, accounts could have reflected the following:

Dr Stock £950,000
Cr Closing stock (CoS) £950,000

This year’s opening journal

Dr Opening stock (CoS) £950,000
Cr Stock £950,000

So where’s the problem?

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By Paul Crowley
15th Mar 2021 20:10

Best look at a TB
Check that the profit brought forward agrees

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By Truthsayer
15th Mar 2021 22:35

You need to do a better job at writing your question. Use actual figures as they appear on your January P&L and B/S, then we might know what you're on about. From what you say, I can't see what you think is wrong.

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RLI
By lionofludesch
16th Mar 2021 06:28

How have you got a £50k provision on your balance sheet if all your provisions are reset to zero?

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By paulwakefield1
16th Mar 2021 08:06

I am reading the question as meaning the closing stock in the P&L is out by £50k. I suspect that your opening stock in the P&L is also out by the same amount. So Debit Closing stock (P&L) £50k and Credit Opening Stock (P&L) £50k.

More information is needed to be able to really help.

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Routemaster image
By tom123
16th Mar 2021 08:37

Your provision in P&L was a one time 'hit' so obviously that resets for the new year.

Where was the balance sheet 'credit' for this item.

It should still be there?

Otherwise, is there a chance you posted your original provision as a reversing entry and it has reversed in the new year?

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Psycho
By Wilson Philips
16th Mar 2021 08:42

There’s a lot of guesswork going on. If the OP can’t be bothered to respond to the request for more meaningful information it’s a bit of a waste of time and effort.

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Replying to Wilson Philips:
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By Tax Dragon
16th Mar 2021 09:04

Wilson Philips wrote:

There’s a lot of guesswork going on. If the OP can’t be bothered to respond to the request for more meaningful information it’s a bit of a waste of time and effort.

That's how I feel on about 90% of threads.

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Replying to Tax Dragon:
Routemaster image
By tom123
16th Mar 2021 18:07

Mind you that's 90% of the Internet as a whole :)

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Replying to Tax Dragon:
Routemaster image
By tom123
16th Mar 2021 18:07

Mind you that's 90% of the Internet as a whole :)

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Replying to tom123:
Psycho
By Wilson Philips
16th Mar 2021 18:12

I make that 180%, then.

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Replying to tom123:
RLI
By lionofludesch
16th Mar 2021 18:14

Keep an eye on that Parkinson's, Tom.

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Replying to lionofludesch:
Routemaster image
By tom123
16th Mar 2021 19:24

Thanks - that and the memory loss!

Was trying to remember names yesterday, talking to my wife:

"Rod - you know"
"Hull?"
"No, the singer"
"Oh, Stewart.."

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Replying to Tax Dragon:
Routemaster image
By tom123
16th Mar 2021 18:07

Mind you that's 90% of the Internet as a whole :)

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