Use the information below to answer questions Jan. 1 Received 1,000 units at N10 each Jan. 2 Received 2,000 units at N12 each Jan. 3 Issued 1,500 units Jan. 4 Received 1,000 units at N11 each Jan. 5 Issued 1,000 units What is the value of closing stock using simple average?
A. N11,500 B. N17,000 C. N16,500 D. N28,500
Correct Answer: C
Explanation
In this method of stock valuation, the average unit cost is calculated by multiplying the total of the unit costs by the number of receiving.Â
issue price method
Date
Receipt Issue Balance
Simple average
Â
Qty
price
Value
Dispatch Qty
Balance
1/1
1000
10
10000
-
1000
2/1
2000
12
24000
-
3000
3/1
-
-
-
1500
1500
4/1
1000
11
11000
-
2500
Â
5/1
-
-
-
1000
1500
Total
Â
4000
33
Â
2500
1500
The closing stock using simple average = (33 ÷ 3) x 1500 = 16500
