Some years back you purchased some stock item, B221, for a project. After the project ended you still have about 192 units of B221 left in store. You bought this item at a cost of $245.00 per unit. Now, the market value for this item dropped to about $220.00 per unit. So, how can you adjust your stock value from $245.00 per unit down to $220.00 per unit to reflect an accurate stock assets value in your financial report?
Assuming you wanted to adjust the stock value as of 30 Sep 2010, and on this day there is no movement of this stock item.
First, you need to add a new expense account; usually I name it as ‘Stock Adjustment Expense’ account.
Next, from your item list, click the ‘Activities’ button and select ‘Adjust Quantity/Value On Hand feature.
In the Adjust Quantity/Value on Hand window, check the check box for Value Adjustment (lower left corner), so the New Value column will be shown on the Window. Since there is no change in quantity, you can enter 192 in the New Qty column. The total value now should be $42,240.00 ($220.00 x 192 unit); therefore, you should enter 42,240.00 in your New Value column.
Total value adjusted for this transaction is 4,800.00, that is, 245 – 220 = 25 x 192 units = 4,800.00. It will debit Stock Adjustment Expense account (Profit and Loss report) 4,800.00 and credit Stock Assets account (Balance Sheet report) 4,800.00.
Click the Save & Close button to complete the Stock Adjustment transaction.
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