After preparing its draft final accounts for the year ended 31 December 23Y1 and its draft balance sheet as at 31 December 23Y1, XYZ Ltd discovered that the stock lists used to compute the value of stock as at 31 December 23Y1 contained the following entry Stock item Number Cost per unit Total cost D789 140 2 75 385 Required (a) What is wrong with this particular entry (b) What would the effect of the error have been on (i) the value of stock as at 31 December 23Y1 (ii) the cost of goods sold for the year ended 31 December 23Y1 (iii) the net profit for the year ended 31 December 23Y1 (iv) the total for Current Assets as at 31 December 23Y1 (v) the Owners Capital as at 31 December 23Y1

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Question: After preparing its draft final accounts for the year ended 31 December 23Y1 and its draft balance sheet as at 31 December 23Y1, XYZ Ltd

After preparing its draft final accounts for the year ended 31 December 23Y1 and its draft balance sheet as at 31 December 23Y1, XYZ Ltd discovered that the stock lists used to compute the value of stock as at 31 December 23Y1 contained the following entry:

Stock item	Number	Cost per unit	Total cost
D789	140	£2.75	£385

Required: (a) What is wrong with this particular entry? (b) What would the effect of the error have been on: (i) the value of stock as at 31 December 23Y1? (ii) the cost of goods sold for the year ended 31 December 23Y1? (iii) the net profit for the year ended 31 December 23Y1? (iv) the total for Current Assets as at 31 December 23Y1? (v) the Owner’s Capital as at 31 December 23Y1?

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