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CA Final · Financial Reporting · Ind AS 2 Inventories

Deccan Steel Ltd values its inventory of a standard bar using the weighted average cost formula, applied periodically. Opening stock was 2,000 units at ₹300. Purchases during the month: 3,000 units at ₹320 and 5,000 units at ₹340. Closing stock at month end is 4,000 units. What is the value of closing stock?

The weighted average cost is ₹32,60,000 divided by 10,000 units, or ₹326 per unit. Closing stock of 4,000 units is therefore ₹13,04,000, which is not among the choices.

  1. A₹13,20,000
  2. B₹13,36,000Correct
  3. C₹13,60,000
  4. D₹12,00,000

Explanation

Total cost = 2,000 x 300 + 3,000 x 320 + 5,000 x 340 = 6,00,000 + 9,60,000 + 17,00,000 = ₹32,60,000. Total units = 10,000, so weighted average = ₹326. Closing stock = 4,000 x 326 = ₹13,04,000. This does not match any option, so the key is flawed.

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