Use the following information to answer the questions below A manufacturing company's cost of production was D 200,000. The finished goods were transferred ...

Answer Details

The value of the closing stock of finished goods that would be shown in the balance sheet is D19,800. Closing stock refers to the value of the inventory that is still unsold at the end of a period, such as the end of the year. In this case, 9% of the finished goods were still in the warehouse at the end of the year, so to calculate the value of the closing stock, we need to determine the cost of this inventory. The cost of production was D200,000 and the finished goods were transferred to the warehouse at D220,000, so the difference of D20,000 represents the profit on the production. To determine the cost of the closing stock, we need to divide the profit by the percentage of goods still in stock, which is 9%. D20,000 / 9% = D222,222.22 The value of the closing stock is then calculated as the cost of production plus the profit, which is D200,000 + D22,222.22 = D222,222.22. Finally, to determine the value of the closing stock of finished goods that would be shown in the balance sheet, we need to multiply this amount by the percentage of goods still in stock, which is 9%. D222,222.22 x 9% = D19,800 Therefore, the value of the closing stock of finished goods that would be shown in the balance sheet is D19,800.