Question

Undervaluation of closing stock by 10%, closing stock was of ₹ 54,000. Find out the value of closing stock.

Answer 1

Undervaluation of closing stock by 10%

Revised value = `("Book value")/(100  –  %  "of undervaluation") xx 100`

`= (54,000)/(100 - 10) xx 100`

`= (54,000)/90 xx 100`

= ₹ 60,000

∴ Value of closing stock = ₹ 60,000