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 eachSolution
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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