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