CA Foundation · Accounting · Inventories
Gupta Textiles reports closing inventories as: raw materials ₹4,00,000; work-in-progress ₹1,50,000; finished goods ₹3,50,000; stores and spares ₹1,00,000. What total carrying amount of inventories is shown, with classification disclosed as per AS 2?
The total carrying amount of inventories is ₹10,00,000, the sum of raw materials ₹4,00,000, work-in-progress ₹1,50,000, finished goods ₹3,50,000 and stores and spares ₹1,00,000. Each class is disclosed separately, and stores and spares are included as inventories.
- A₹8,00,000
- B₹10,00,000Correct
- C₹9,00,000
- D₹6,50,000
Explanation
Total = 4,00,000 + 1,50,000 + 3,50,000 + 1,00,000 = ₹10,00,000. Excluding stores and spares gives ₹9,00,000, which is wrong because stores and spares are also inventories. Excluding raw materials and spares or other omissions give ₹8,00,000 or ₹6,50,000 incorrectly.
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