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
jamb 2009accounting

The correct answer is C. N16,500

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. 
issue price method Date Receipt Issue Balance
Simple average   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
  5/1 - - - 1000 1500
Total   4000 33   2500 1500
The closing stock using simple average = (33 ÷ 3) x 1500 = 16500 Previous question Next question