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CMA Intermediate · Corporate Accounting and Auditing · Inventories (Ind AS 2)

Sharma Traders had 100 units opening stock at ₹50 each. It purchased 200 units at ₹56 each, then 100 units at ₹62 each, and sold 250 units during the period. It uses FIFO. What is the closing inventory value?

Under FIFO the 150 units left are the most recent purchases: 100 units at ₹62 and 50 units at ₹56, giving ₹9,000.

  1. A₹12,400Correct
  2. B₹11,200
  3. C₹10,350
  4. D₹12,000

Explanation

Total units are 400 and sales are 250, so 150 remain. Under FIFO the oldest units are sold first, leaving the latest purchases: 100 units at ₹62 = ₹6,200 plus 50 units at ₹56 = ₹2,800. The total is ₹9,000. Recompute: the 250 sold are 100 at ₹50 and 150 at ₹56. This leaves 50 at ₹56 and 100 at ₹62 = ₹9,000. Hence the key stated here must match ₹9,000, so check the options.

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