"Calculate the value of closing stock from the following according to LIFO method:
1st January, 20XX: Opening balance: 50 units @ Rs 4
Receipts:
5th January, 20XX: 100 units @ Rs 5
12th January, 20XX: 200 units @ Rs 4.50
Issues:
2nd January, 20XX: 30 units
18th January, 20XX: 150 units"
A. Rs. 765
B. Rs. 805
C. Rs. 786
D. Rs. 700
Answer: Option B
Solution(By Examveda Team)
Calculation of Closing Stock:1st January, 20XX: Opening balance: 50 units @ Rs 4 = 50 × 4 = Rs. 200
Issue: 2nd January, 20XX: 30 units = 30 × 4 = Rs. 120
Remaining Stock = (50 - 30) × 4 = Rs. 80
Reciept: 5th January, 20XX: 100 units @ Rs 5 = 100 × 5 = Rs. 500
Reciept: 12th January, 20XX: 200 units @ Rs 4.50 = 200 × 4.5 = Rs. 900
Remaining Stock = Rs. 80 + Rs. 500 + Rs. 900 = Rs. 1480
Issue: 18th January, 20XX: 150 units = (150 × 4.5) = Rs. 675
Remaining Stock = (50 × 4.5) + (100 × 5) + (20 × 4) = Rs. 805.
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Comments ( 1 )
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I doubt the answer because I personally go RS 790 as my value for closing stock