Out of total closing stock, 10% of the goods, its market value increased by 35%, 35% of the goods, its market value decreased by 10%, 20% of the goods, its market value is Rs. 4,800, which is 20% more than the cost price and 5% of the goods, its market value decreased by 2.5%. Find out the value of closing stock.
A. Rs.27,675
B. Rs.19,275
C. Rs.20,775
D. Rs.28,725
Answers
Out of total closing stock, 10% of the goods, its market value increased by 35%, 35% of the goods, its market value decreased by 10%, 20% of the goods, its market value is Rs. 4,800, which is 20% more than the cost price and 5% of the goods, its market value decreased by 2.5%. Find out the value of closing stock.
A. Rs.27,675
B. Rs.19,275
C. Rs.20,775
D. Rs.28,725 ✔
Answer:
D. Rs.28,725 ✔
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 :)