Multiple choice

E Ltd, a dealer in second hand cars, has the following five vehicles of different models and makes in their inventory at the end of the financial year 2015-2016

         
Car Fiat Ambassador Maruti Esteem Maruti 800 Zen
Cost 90,000 1,15,000 2,75,000 1,00,000 2,10,000
Net realisable value 95,000 1,55,000 2,65,000 1,25,000 2,00,000

What is the value of inventory to be included in the balance sheet of the company as on March 31, 2016?

  1. Rs. 7,62,500

  2. Rs. 7,70,000

  3. Rs. 7,90,000

  4. Rs. 8,70,000

  5. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Inventory is valued at cost or net realisable value, whichever is lower. Applying the above principle in question, we get Closing inventory = 90,000 + 1,15,000 + 2,65,000 + 1,00,000 + 2,00,000 Closing inventory = Rs. 7,70,000

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