Balance Sheet/profit & Loss

[MORT1703]

hi folks I am having a bit of difficulty with the P&L and the balance sheet

Simple Scenario

I am going start with 0 cash, I buy on credit £1000 worth of stock, according to my understanding this would mean

stock would increase by 1000
debtors would increase by 1000

this in itself should balance, however when I try to add the P&L to my equity I get a negative balance of -1000 appearing from the P&L, which in turn means my balance sheet doesn't balance

any ideas what I am missing or doing wrong?

[MORT1703]

i am aware that I have gotten debtors mixed up with creditors

[Scalloway]

Your P&L will be:

Sales.......................0
Purchases..............1,000
Less closing stock .(1,000)
Profit .........................0

[shahidzia420]

Balance Sheet
As on ------------

Debit side Credit Side

Stock 1,000 Payable 1,000

---------- ------------
1,000 1,000
======== ==========

Thanks

[Truemanbrown]

Basically P & L is as stated by Scalloway.

Balance Sheet would be:-

CURRENT ASSETS
Stock-------------------1,000

CREDITORS: DUE LESS THAN ONE YEAR
Trade Creditors----------1,000

TOTAL ASSETS LESS
CURRENT LIABILITIES----0
------------------------=====

[curious-man]

The forum members reflected the balance sheet correctly. I just want to specify that P&L will be totally null until you sell the stock (with or without processing it).