doubt needd attention.....trying for long

abhishek (article) (89 Points)

06 December 2010  

how do you value stock under following situation?

closing stock conists of 4800units purchased @ RS 5 each .at the end,the firm realises thar the closing stock is not that it would choose to acquire the market place .an eqiuvalent product is avilable in the market which can be acquired @ RS 4 each.in the effect the firm has to reduce the selling price of the product from RS 6.25 to RS 4.75.the closing stock in its present physical form can be sold in hte market at 2.25RS each. if the firm wants to replace the existing stock by the new equivalent stock by the new equivalent product ,it has to pay an additional amount of rs 1.50 per unit?
sir isma valuation 4800(rs 4 - rs 1.50)=rs 12000 kaisa kiya please help