Sale of Sheep (Stock) How to account for this

Accounting
1

Stock Sale - I am a sheep farmer and I have sold some lambs for the first time. They were given the sales code 4002 Sheep Trading. This puts them into the P&L account as a sale which I don’t think is correct.

I thought only the gross profit from sheep trading should be in the P&L account. I still have the original purchased sheep and they are my stock. At the end of the year I was going to prepare notes to the accounts as follows. With the gross profit from sheep trading going into the P&L account.

Sheep Trading
Sales 2,525
Closing stock 1,000
Total 3,525

less:
Opening stock 750
Purchases 1,250
Total 2,000

Gross Profit 1,525

The figures are just examples to help explain.

I think it would be better to put one sales figure into Quickfile (the gross profit) under sales code 4002 Sheep Trading at the end of the year and prepare the Sheep Trading notes as explained above and not put through the individual sheep sales during the year. If I did this, how would I tag the sheep sale income that I have received.

I am self employed and VAT registered. Is anyone able to help on this point. Thanks

2

You should record sheep buying as purchases and do a stock take at end of year to move figure to closing stock. Live stocks would be subject to special rules for valuation under agriculture accounting

3

Thank you for that reply, also what about sheep sales during the year. How do I account for them in Quickfile.

4

If you issue invoices to your customer you can tag them under General Sales or create new codes for all kind of sales e.g sheet, cows etc to keep track of different kind of sales

5

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