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    Question

    Calculate the valuation of closing stock using simple average method from the following information:

    ·         100 units purchased for 20 each

    ·         200 units purchased for 22 each

    • Sold 250 units at 23 each

    A 1000 Correct Answer Incorrect Answer
    B 1100 Correct Answer Incorrect Answer
    C 1050 Correct Answer Incorrect Answer
    D 1200 Correct Answer Incorrect Answer
    E 1250 Correct Answer Incorrect Answer

    Solution

    Closing inventory in units = Opening Stock + Purchases – Sales = 100+200 – 250 = 50 units Simple average price =average of price without considering the quantity =  (20+22)/2 = 21 per unit So, valuation of Closing Inventory = 50*21 = 1050 

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