CMA Intermediate · Corporate Accounting and Auditing · Inventories (Ind AS 2)
Gupta Ltd. had opening stock of 400 units at ₹100. During the period it bought 600 units at ₹110 and then issued 500 units. It uses the periodic weighted average formula. What is the cost of the closing inventory?
The periodic weighted average cost is ₹1,06,000 divided by 1,000 units, giving ₹106 per unit. The 500 units remaining are valued at ₹53,000.
- A₹53,200Correct
- B₹53,000
- C₹54,000
- D₹55,000
Explanation
Total cost = 400×100 + 600×110 = 40,000 + 66,000 = ₹1,06,000 for 1,000 units, so average is ₹106. Closing units = 500, so closing cost = 500×106 = ₹53,000. Recheck: the correct value is ₹53,000, and the ₹55,000 option comes from using FIFO (500 units at ₹110).
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