After preparing its draft final accounts for the year ended 30 June 21Y3 and its draft balance sheet as at 30 June 21Y3, GHI Ltd identified an error in the stock lists used to compute the value of stock as at 30 June 21Y3 The entry was Stock item Number Cost per unit Total cost L789 70 4 00 280 Required (a) Explain the discrepancy in this entry (b) Assess the effects of the error on (i) the stock valuation as at 30 June 21Y3 (ii) the cost of goods sold for the year ended 30 June 21Y3 (iii) the net profit for the year ended 30 June 21Y3 (iv) the total for Current Assets as at 30 June 21Y3

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Question: After preparing its draft final accounts for the year ended 30 June 21Y3 and its draft balance sheet as at 30 June 21Y3, GHI Ltd

After preparing its draft final accounts for the year ended 30 June 21Y3 and its draft balance sheet as at 30 June 21Y3, GHI Ltd identified an error in the stock lists used to compute the value of stock as at 30 June 21Y3. The entry was:

Stock item	Number	Cost per unit	Total cost
L789	70	£4.00	£280

Required: (a) Explain the discrepancy in this entry. (b) Assess the effects of the error on: (i) the stock valuation as at 30 June 21Y3. (ii) the cost of goods sold for the year ended 30 June 21Y3. (iii) the net profit for the year ended 30 June 21Y3. (iv) the total for Current Assets as at 30 June 21Y3.

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