Stock is valued using FIFO. Opening stock was 10 units at Rs. 2 each. Purchases were 30 units at Rs. 3 each, then issues of 12 units were made, followed by issues of 8 units. The value of closing stock will be?
Answer: Rs. 60
Explanation
To find the value of closing stock using FIFO:
Initial stock: 10 units @ Rs. 2 = Rs. 20
Purchases: 30 units @ Rs. 3 = Rs. 90
Total stock: 40 units
Issues: 12 units (from initial stock) = 10 units @ Rs. 2 + 2 units @ Rs. 3
Remaining stock: 28 units (2 units @ Rs. 3 + 30 - 2 = 28 units @ Rs. 3)
Issues: 8 units (from purchases) = 8 units @ Rs. 3
Remaining stock (closing stock): 20 units @ Rs. 3
Value of closing stock: 20 units @ Rs. 3 = Rs. 60
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