As2 valuation of inventories

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MPR Sanjay Kumar

3145 Points Joined November 2020

Joy limited purchased 20000 kg of raw material at rupees 20 per kg during the year 2020 to 2021.

particulars. units. amount

opening inventory
finished goods. 2000. 100000
raw materials. 2200. 44000
direct labour. 306000
fixed overheads. 300000
sales. 20000. 1120000

closing inventory

finished goods. 2400

raw materials. 1800

The plant has a capacity to produce 30,000 units of finished product per annum.however the actual production of finished products during the year 2020-21 was 20400 units. due to fall in the market demand the price of the finished goods in which the raw material has been utilised is expected to be sold at rupees 40 per unit The replacement cost of the raw material was 19 rupees per kg

you are required to ascertain the value of closing inventory as at as per accounting standard 2 31 March

plse explain me this problem.....

Replies (5)

yasaswi gomes

My grammar is 💯 good I

7296 Points Joined March 2019

I don’t understand why there is a dot in between the numbers. Give me the real numbers and it can be sorted out

sabyasachi mukherjee

28079 Points Joined May 2017

AS PER ACCOUNTING STANDARD 2 VALUATION BASIS IS COST OR MARKET VALUE WHICHEVER IS LESS.
IF YOU CANT COMPUTE THIS .
GIVE ME REAL LIVE EXAMPLES.

THESE ARE EXTRACT FROM CLASS 12 COST AND ACCOUNTING BOOK.

yasaswi gomes

My grammar is 💯 good I

7296 Points Joined March 2019

. I was wondering why the numbers are like that. It happens every not one n B.com and CEC. Even b.com has inventory valuation as lower of cost or NRV

sabyasachi mukherjee

28079 Points Joined May 2017

While pursuing ca course also these type of problems are there.
solve it at the earliest.

yasaswi gomes

My grammar is 💯 good I

7296 Points Joined March 2019

Sorry to hear CA questions are sometimes tricky. I know that questions have additional matter to confuse and we have to use only the relevant data. CPA is better I guess, because I remember trying an online exam and questions are asked precisely.

For the above, no answer because numbers are not correct.