Do it on your own - Stock Evaluvation

Topic: Stock Valuation ( As per Accounting Standard-2)

1. Prepare a Stores Ledger Account from the following information for the month of December 2007 on the basis of FIFO method.

2007	December 3	Opening Balance	200 kg	@ Rs.20 Per kg
	December 4	Issue	100 kg
	December 10	Issue	50 kg
	December 18	Purchases	300 kg	@ Rs.18 Per kg
	December 20	Issue	300 kg
	December 28	Purchases	50 kg	@ Rs. 15 Per kg
	December 30	Issue	10 kg
	December 30	Received back from completed job 5kg (previously issued at Rs. 20 per kg)

Ans: Stores Ledger Account ( FIFO Method)

Date	Receipts			Issues			Balance
	Qty	Rate	Amt	Qty	Rate	Amt	Qty	Rate	Amt
2007 Dec 3							200	20	4,000
4				100	20	2,000	100	20	2,000
10				50	20	1,000	50	20	1,000
18	300	18	5,400				50 300	20 18	1,000 5,400
20				50 250	20 18	1,000 4,500	50	18	900
28	50	15	750				50 50	18 15	900 750
30				10	18	180	40 50	18 15	720 750
30	5	20	100				40 50 5	18 15 20	720 750 100
Closing Stock									1520

2.From the following details, find out closing stock as per LIFO method.

2007	November 4	Purchases	20 units	@ Rs.15 Per Unit
	November 17	Purchases	30 Units	@ Rs.14 Per Unit
	November 20	Sales	25 Units	@ Rs.20 Per Unit
	December 2	Purchases	40 Units	@ Rs.14.50 Per Unit
	December 5	Sales	40 Units	@ Rs.21 Per Unit
	December 10	Sales	10 Units	@ Rs.18 Per Unit
	December 30	Purchases	50 Units	@ Rs.13 Per Unit
	December 31	Sales	45 Units	@ Rs.15 Per Unit

On 20^th December 2007, the customers returned two units sold on 10th December 2007. On 29^th December 2007, one unit was damaged and it had to be discarded.

Ans: Stores Ledger Account (LIFO Method)

Date	Receipts			Issues			Balance
	Qty	Rate	Amt	Qty	Rate	Amt	Qty	Rate	Amt
2007 Nov 4	20	15	300				20	15	300
17	30	14	420				20 30	15 14	300 420
20				25	14	350	20 5	15 14	300 70
Dec 2	40	14.5	580				20 5 40	15 14 14.5	300 70 580
5				40	14.5	580	20 5	15 14	300 70
10				5 5	14 15	70 75	15	15	225
20	2	15	30				15+2	15	255
29				1	15	15	15+1	15	240
30	50	13	650				16 50	15 13	240 650
31				45	13	585	16 5	15 13	240 65
Closing Stock								28	305

3.The following particulars have been extracted in respect of material X

Prepare a Stores Ledger Account showing the receipts and issues, pricing the materials issued on the basis of Weighted Average (Under both the system)

Receipts:
2007	October 1	Opening Stock	200 units	@ Rs.3.50 Per unit
	October 3	Purchased	300 units	@ Rs.4.00 Per unit
	October 13	Purchased	900 units	@ Rs.4.30 Per unit
	October 23	Purchased	600 units	@ Rs.3.80 Per unit
Issues:
	October 5	Issued	400 units
	October 15	Issued	600 units
	October 25	Issued	600 units

{Ans: Issue Price – 5^th- 3.80, 15^th- 4.25, and 25^th - 3.98, Closing stock- Rs.1.592}

Ans: Stores Ledger Accounts (Weighted Average Method)

Date 2007	Receipts			Issues			Balance
	Qty	Rate	Amt	Qty	Rate	Amt	Qty	Rate	Amt
Oct 1	200	3.5	700				200	3.5	700
3	300	4	1,200				500	3.80	1,900
5				400	3.80	1,520	100	3.80	380
13	900	4.30	3,870				1,000	4.25	4,250
15				600	4.25	2,550	400	4.25	1,700
23	600	3.80	2,280				1,000	3.98	3,980
25				600	3.98	2,388	400	3.98	1,592

4.Following information is extracted from the nooks of Satyam India for the month of April 2007.

Sales Rs.10,00,000 General Administration cost Rs.30,000 Opening stock: 95,000 units @ Rs.5 each Rs.4,75,000

Purchases: April 1 2,00,000 units @ Rs.3.00 per unit 29 75,000 units @ Rs.4.00 per unit 30 Closing stock 1,20,000 units.

Compute the following by FIFO and Weighted Average Method of inventory valuation:

a) Value of stock on April 30

Cost of goods sold for April c) Profit & Loss for April

5.Sumit Ltd. had purchased and issued the materials in the following order: .

2007	August 1	Purchases	300 units	@ Rs.2 Per unit
	August 4	Purchases	600 units	@ Rs.4 Per unit
	August 6	Issues	500 units
	August 10	Purchases	700 units	@ Rs.4 Per unit
	August 15	Issues	800 units
	August 20	Purchases	300 units	@ Rs.5 Per unit
	August 23	Issues	100 units

Ascertain the quantity of closing stock as on 31^st August 2007 and state what will be the value under the following methods:

i) FIFO Method

ii) Weighted Average Method Under Physical Inventory Method and Perpetual Inventory

6. Problem No.3 Under Weighted average method.

7. Problem No.4 Under Weighted average method.

8. With the help of the following information, prepare the stores ledger card based on the Weighted Average Method of pricing issues (Under both the systems).

September 1	Opening stock	24,000 kg	@ Rs.7,500 per tone
1	Purchased	44,000kg	@ Rs.7,500 per tone
1	Issue	10,000kg
5	Issue	16,000kg
September 12	Issue	24,000kg
13	Purchase	10,000kg	@ Rs.7,800 per tone
18	Issue	20,000kg
22	Purchase	50,000kg	@ Rs.8,000 per tone
28	Issue	30,000kg
30	Issue	22,000kg

{Ans: Closing stock 2,000kg @ Rs.7,974}

9.Prepare a Stores Ledger from the following transactions adopting the “Weighted Average Method” of pricing out issues:

2007 June 1	Opening Balance	100 units	@ Rs.3 per unit
5	Issue	4 units
7	Purchase	96 units	@ Rs.4 per unit
9	Issue	40 units
19	Purchase	152 units	@ Rs.3 per unit
24	Received back into stores 38 units out of 40 units issued on 9th June 2007
27	Issue	20 units

{Ans: 322 units –Rs.1,056; Rates Rs.3,3.5,and 3.277}