Stock Valuation

Dear All
 
What should be the Value of Closing stock in the following case
 
I/P units 105units(Cost Rs. 10500)
 
F/G-100units.
MV Rs. 15000.
Assume no other Conversion Cost.
The loss of 5units is a normal loss of the process undertaken.
Now i am clear that as per AS-2 para 13 abnormal loss is to be excluded.
what about normal loss? Quote Relevant para of AS/CAS.

In this case value of Closing should be Rs 10500 (100Units). Since it is given that 5 units are Normal loss so it should be charged by good products.

Originally posted by :Vipul Garg


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Dear All
 
What should be the Value of Closing stock in the following case
 
I/P units 105units(Cost Rs. 10500)
 
F/G-100units.
MV Rs. 15000.
Assume no other Conversion Cost.
The loss of 5units is a normal loss of the process undertaken.
Now i am clear that as per AS-2 para 13 abnormal loss is to be excluded.
what about normal loss? Quote Relevant para of AS/CAS.
 
In this case value of Closing should be Rs 10500 (100Units). Since it is given that 5 units are Normal loss so it should be charged by good products.

"as per AS-2, normal loss is to be borne by good units. so the cost of rs.10500 will be for 100 units(105 units - 5 units) and therefore, cost per unit will be rs 10.50.

stock is valued at cost and not at market value.