CS Executive · Corporate Accounting and Financial Management · Accounting Standards
Gupta Ltd had opening stock of 200 units at Rs 50 each. It purchased 300 units at Rs 60 each, then 100 units at Rs 70 each, in that order. During the year 450 units were sold. Closing stock under FIFO, in rupees, is:
Closing stock under FIFO is Rs 10,000, being 100 units at Rs 70 and 50 units at Rs 60. The sales consume the earliest units first, leaving the latest purchases in stock.
- ARs 9,000Correct
- BRs 8,500
- CRs 8,000
- DRs 9,500
Explanation
Total units = 600; closing = 150 units. FIFO treats the latest purchases as remaining: 100 units at Rs 70 = 7,000 plus 50 units at Rs 60 = 3,000, total Rs 10,000. Rechecking: sold 450 = 200 at 50 + 250 at 60, leaving 50 at 60 and 100 at 70 = Rs 10,000. The closest listed figure fails, so the stated key is incorrect.
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