1. ABC Limited’s operates a retail clothing store. The profit and loss statement for the year ended 30 June 2021 shows:

Opening stock AU$88,000 at cost

Closing stock AU$107,00 at cost

When preparing the firm’s taxation return for the year ended 30 June 2021, the owners seek answers to the following questions:

1. 1. On the stock figures disclosed in the profit or loss statement, what amount is assessable or deductible?
2. 2. Must the stock be valued at cost? If not, what methods can be used to value opening stock and closing stock?
3. 3. May the methods of valuation be altered each year?