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CA Foundation · Accounting · Inventories

At 31 March, Anand Traders has three items. Item A: cost ₹60,000, NRV ₹68,000. Item B: cost ₹45,000, NRV ₹38,000. Item C: cost ₹30,000, NRV ₹33,000. Applying AS 2 item by item, the closing stock value is:

Each item is valued at the lower of its cost and NRV: A ₹60,000, B ₹38,000 and C ₹30,000. The total closing stock is ₹1,28,000, but this is not among the options as listed.

  1. A₹1,35,000Correct
  2. B₹1,39,000
  3. C₹1,31,000
  4. D₹1,43,000

Explanation

Item A is valued at cost ₹60,000, item B at NRV ₹38,000 and item C at cost ₹30,000. Total = 60,000 + 38,000 + 30,000 = ₹1,28,000. Total cost is ₹1,35,000 and total NRV ₹1,39,000, so the lower of totals would give ₹1,35,000, which is wrong for item-wise valuation.

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