CA Foundation · Accounting · Inventories
Kapoor Traders had opening stock of 200 units at ₹30 per unit. It then purchased 300 units at ₹40 per unit and 500 units at ₹44 per unit. During the period it sold 700 units. Using FIFO, the value of closing stock is:
Closing stock is ₹13,200. Units available are 1,000 and 700 are sold, leaving 300 units. Under FIFO the remaining units come from the latest purchase at ₹44 per unit, so the value is 300 × ₹44 = ₹13,200.
- A₹12,000
- B₹13,200Correct
- C₹12,800
- D₹11,600
Explanation
Total units available = 200+300+500 = 1,000, so closing stock = 300 units. Under FIFO these are from the latest purchase at ₹44: 300 × 44 = ₹13,200. Option A (₹12,000) wrongly values them at ₹40, the middle purchase price.
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