Software: MoneyWorks accounting software
Assuming when cross over to MoneyWorks accounting software as at 31 December 2014, you created a stock item, P101, but forgotten to add the “buy price” (average cost as at the closing date) in the item profile. When 3 pieces of P101 were recorded as a closing stock quantity, due to zero “buy price”, MoneyWorks created a stock journal by debiting the “Stock on Hand” account and credit the “Setup” account at zero value.
Without noticing the closing balance error, 1 piece of P101 was sold at $300 in January and posted; it debited the “accounts receivable” and credited the “sales” account, but due to no stock cost, the cost of sales account was not being debited.
You realised the error and a “Revalue Journal” was passed to adjust the unit cost to $100. Although the transaction date of the revaluation journal was dated as at 31 December 2014, the actual stock on hand as at the date of passing the “Revalue Journal” was 2 pieces (after the sales invoice transaction was posted). Hence, MoneyWorks only debited “Stock on Hand” account 200 instead of 300. You need to pass a “General Journal” to debit 100 to the “Stock on Hand” account to manually adjust the closing balance.
As of 31 December 2014, the Balance Sheet report should be:
Stock On Hand: 300
A journal also need to be passed in January to manually adjust the “Cost of Goods Sold” account. You should be debited 100 to the “Cost of Goods Sold” account and credited the “Stock on Hand” account.
The Profit and Loss report for the month of January 2015 should be:
Cost of Goods Sold: 100
Gross Profit: 200