Out of total closing stock,
10% of the goods, its market
value decrease by 15%; 35%
of the goods, its market
value is increase by 10%; and
25% of the goods, its market
value is Rs. 1200, which is
20% less than the cost price.
Find out the value of closing
stock to be shown in the
Balance Sheet.
A. Rs. 5610
B. Rs. 5700
C. Rs. 6000
D. Rs. 7200
Answers
Answer:
A. Rs. 5610
Explanation:
First of all, we need to find the total cost value of closing stock .
As per the question, 25% of the stock's market value is ₹1200 which is 20% less than the cost price.
So, the cost price of 25% stock is = 1200×100 / 80 (∵ ₹1200 is 20% less than cost price (100%) so, 80% )
= ₹1500
So, cost price of total closing stock = 1500 × 100 / 25
= ₹ 6000
Now, as per AS-2, closing stock is to be shown in the balance sheet at cost or net realisable value / market value whichever is lower.
⇒ 10% of stock's market value is 15% lower than cost. So, we shall find market value of 10% stock.
Cost of 10% stock = 6000 × 10%
= 600
Market value of 10% stock = 600 × 85%
= 510
⇒ 35% stock's market value is 10% higher than it's cost. So, we will have to show it at cost itself. cost of 35% stock = 6000 × 35% = 2100
⇒ 25% stock's market value is 20% lower than cost. So, we will have to show it at market value, which is clearly mentioned in the question i.e 1200
⇒ Remaining stock = 30%
Since, nothing is mentioned about this remaining portion of the stock, we may show it at it's cost value i.e. 6000 × 30% = 1800
Finally adding all the portions calculated till now, we get;
510+2100+1200+1800 = 5610
Hope this helps you :)
Answer:
A. Rs. 5610
Explanation:
A. Rs. 5610.
I hope this is helpful.