Hi,
I ran into an issue while doing company accounts. Since the start of the company last year, the company bought stock to resell for £94,000. This includes £50,000 worth that just arrived last week. Anything before this was sold. I put all of their stock purchases into the current assets - stock account to show on the balance sheet. However, now, the price that they have paid for the stock is not on the profit and loss account as a purchase expense, only stock, which skyrocketed the net profit for the end of the year.
I need to decrease the stock by about £48,000 that has already been sold and show the purchase expenses on the profit and loss account. I put all of the sales in the income - sales account and cost of sales into cost of sales accounts.
How can I have the stock purchased as an expense on the profit and loss account and the remaining stock on the balance sheet as available inventory to be sold?
For extra information, now the stock account is at £94,000, and because these stock purchases are not shown on the profit and loss account, the net profit is £80,000.
Attach images for reference.
Any help would be greatly appriciated.
Thank you.
