Stock on hand headache!

gustav

This is a different type of "profit" to the one that requires the counting of stock for balance sheet purposes, like the OP was suggesting.
When you have your own business, you will (need to ) understand.
"Profit" comes in many colours and flavours.

G

gustav

I would also highly recommend

ukbusinessforums co uk

for anybody with similar small business queries. They are a pretty knowledgeable bunch and you can very often find that somebody else has already asked the same question.

G.

antrobus

gustav wrote: »

This is a different type of "profit" to the one that requires the counting of stock for balance sheet purposes, like the OP was suggesting.
When you have your own business, you will (need to ) understand.
"Profit" comes in many colours and flavours.

G

Mmm yes.

You obviously haven't yet grasped the fundamentals of double entry book-keeping, have you? That debit for stock that appears in your balance sheet for stock is matched by an equal and matching credit that appears in your profit and loss account.

To put it simply, stock represents the amount of money you are not going to claim as a business expense this year, but are rather going to carry forward and claim as a business expense in subsequent years. Hence the OP's original question.

antrobus

gustav wrote: »

I would also highly recommend

ukbusinessforums co uk

for anybody with similar small business queries. They are a pretty knowledgeable bunch and you can very often find that somebody else has already asked the same question.

G.

Why yes indeed.

You could try this one:-
http://www.ukbusinessforums.co.uk/forums/showthread.php?t=249017

that contains the quote "Unsold websites are stock in hand. Their cost should be deducted from your purchases and added to the balance sheet as a current asset"

or this one
http://www.ukbusinessforums.co.uk/forums/showthread.php?t=250832

that contains the quote " I don't know how to calculate a cost of sale without having closing stock. I said to him it is needed to calculate accurate profit for the year, but it hasn't changed his attitude."

So there are certainly some people there who understand the relationship between the value of closing stock and profit.

Strapped

gustav wrote: »

This is a different type of "profit" to the one that requires the counting of stock for balance sheet purposes, like the OP was suggesting.
When you have your own business, you will (need to ) understand.
"Profit" comes in many colours and flavours.

G

:rotfl:Could you be a bit more patronising to the OP and other posters, please?

OP, as I think has been covered now, your total cost of goods sold are part of your expenses for the year. You can either tot them up as you go along (which is what I do) or have a massive stock-take at the beginning and end of the year, and the difference is the amount you want. As already mentioned, stock is valued at the lower of cost or what you can realistically get for it, so if you do tot up as you go along then you also need to remember to add in an amount for obsolete stock by year end. I hope this helps.