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The approximate cost of missing inventory is the difference between1) the cost of the inventory that is actually on hand, and2) the cost of the inventory that should be on hand based on the company's records.
At first, need to determine missing quantity for Inventory Item. Missing Inventory is determined by physical counting in a certain period or any shortage quantity arises between inventory ledger balance and physical balance in any time.
Valuation is determined by Weighted average method or FIFO method based on business practice.
Put the Formula (FIFO) First-in-first-Out method to deremined the missing inventory...
simp,
prepare the "Inventor Schedule of Qty issued ,Purchased and reminning balance"
From last available information and make some adjsutment of the inventory movement qty sold and qty purchsed and issued.
if you will be reached at that level where the inventory in hands math other wise the dfference is the missing inventory
and assign the cost by using the method in the company for assiging the cost i.e wt avg cot , FIFO or LIFO
The approximate cost of missing inventory is the difference between a) the cost of the inventory that is actually on hand, and b) the cost of the inventory on hand the company's records ( Book Value )
If the company uses accounting software along with the perpetual inventory method (and the system is updated, reviewed, and adjusted routinely) then you can subtract the actual inventory on hand from the amounts shown by the software. The difference is the approximate amount of missing inventory.
Missing inventory determined by the difference between Inventory in book Record & Physical check inventory statement
If u identified the missing inventory with100%, you can calculate the inventory value of missing stocks by deducting the inventory as per record (recorded as per the system) from the physical stocks on hand.
And if you do not know the cost value of missed inventory, the current period market value may be added with the cost of goods sold, since closing stock valuation is cost price or market price which ever is lower.
1) Calculate the cost of Sales by Qty Sold * Cost and then compare the cost of sales by applying the formula Opening Stock + Purchases Less Closing Stock
Any descrepancies between this two figures can be Material which is missing..
2) This can also be cross check with the difference between the value of the physical stock and the value of the book stock.
The approximate cost of missing inventory is the difference between1) the cost of the inventory that is actually on hand, and2) the cost of the inventory that should be on hand based on the company's records. If the company uses accounting software along with the perpetual inventory method (and the system is updated, reviewed, and adjusted routinely) then you can subtract the actual inventory on hand from the amounts shown by the software. The difference is the approximate amount of missing inventory. If the perpetual inventory method is not used (or the system is not maintained properly) you can do the following: