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JAMB Principles of Accounts 2017 Question 30

Question 30

Stock Valuation

Use the information below to answer questions 29 and 30.
Jan. 1 Received 1,000 units at ₦10 each
Jan. 2 Received 2,000 units at ₦12 each
Jan. 3 Issued 1,500 units
Jan. 4 Received 1,000 units at ₦11 each
Jan. 5 Issued 1000 units

What is the value of closing stock using simple average?

  1. A.₦11,500
  2. B.₦17,000
  3. C.₦28,500
  4. D.₦17,500
Show the answer and explanation

Answer: B (₦17,000)

Explanation

Jan 3: 1,500 units issued at (10 + 12)/2 = ₦11 = ₦16,500, which uses up the ₦10 lot. Jan 5: 1,000 units at (12 + 11)/2 = ₦11.50 = ₦11,500. Closing stock = 45,000 − 16,500 − 11,500 = ₦17,000.