After completing its draft final accounts for the year ended 31 January 23Y4 and its draft balance sheet as at 31 January 23Y4, GHI Ltd found an error in the stock lists used to compute the stock value as at 31 January 23Y4 The entry was Stock item Number Cost per unit Total cost G234 75 3 60 270 Required (a) What is incorrect about this entry (b) Evaluate the impact of this error on (i) the stock valuation as at 31 January 23Y4 (ii) the cost of goods sold for the year ended 31 January 23Y4 (iii) the net profit for the year ended 31 January 23Y4 (iv) the Owners Equity as at 31 January 23Y4

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Question: After completing its draft final accounts for the year ended 31 January 23Y4 and its draft balance sheet as at 31 January 23Y4, GHI Ltd

After completing its draft final accounts for the year ended 31 January 23Y4 and its draft balance sheet as at 31 January 23Y4, GHI Ltd found an error in the stock lists used to compute the stock value as at 31 January 23Y4. The entry was:

Stock item	Number	Cost per unit	Total cost
G234	75	£3.60	£270

Required: (a) What is incorrect about this entry? (b) Evaluate the impact of this error on: (i) the stock valuation as at 31 January 23Y4. (ii) the cost of goods sold for the year ended 31 January 23Y4. (iii) the net profit for the year ended 31 January 23Y4. (iv) the Owner’s Equity as at 31 January 23Y4.

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