alleryStock of items P, Q, R have cost ₹38L, ₹29L, ₹17L and NRV ₹42L, ₹29L, ₹14L. Closing stock value:
A₹84 lakhs aggregate
B₹83 lakhs aggregate
C₹85 lakhs aggregate
D₹81 lakhs aggregate
Answer & Solution
Correct answer: D. ₹81 lakhs aggregate
1. Apply lower of cost or NRV item by item.
2. P: min(38,42)=38; Q: min(29,29)=29; R: min(17,14)=14.
3. Total = 38 + 29 + 14 = ₹81 lakhs.
_Source: ICAI BoS Foundation Paper 1, Ch 4 "Inventories", Illustration 1_
Keep practising Inventories
Browse all Inventories questions for CA Foundation, or explore more Accounting topics.
Related questions
Land held for resale by a dealer is classified asWhich items count as inventories held as materials or supplies?Stock on 5 April is 2,40,000; April 1-5 sales 50,000 at 25% on cost, purchases 15,000. StoWhich three heads make up the cost of inventories?Costs of conversion include costs directly related to units, such asThe cost of inventories may be unrecoverable if stock isWhich inventory method most closely mimics the physical flow of goods?Opening stock 40,000; purchases 1,60,000; sales 2,00,000; gross profit 25% of sales. Closi