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    Question

    Akash Ltd sells 3 products X, Y and Z. The following

    information was available at the year end : X Y Z Cost 7 10 19 Fair Value 10 8 15 Units 100 200 300
    A 6800 Correct Answer Incorrect Answer
    B 7800 Correct Answer Incorrect Answer
    C 7000 Correct Answer Incorrect Answer
    D 6000 Correct Answer Incorrect Answer
    E 8100 Correct Answer Incorrect Answer

    Solution

    Value of closing inventory is done at Cost or NRV whichever is lower on item-by item basis as per AS 2 or IAS 2 For Product X inventory = 7*100 = 700 For product Y inventory = 8*200 = 1600 For product Z inventory = 15*300 = 4500 So total closing inventory = 700+1600+4500 = 6800

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