Calculate the following on 28 February 2021, the financial year-end: 4.1.1 Value of the closing stock 4.1.2 Stock turnover rate INFORMATION: The following information relates to the running shoes - NSC Accounting - Question 4 - 2021 - Paper 2

To calculate the value of the closing stock on 28 February 2021, we will follow a structured approach:

1. Calculate Total Purchases: Summing the cost of all purchases made during the year.

   • From the data:
     • 15 April 2020: 560 pairs at R820 = R459,200
     • 20 September 2020: 420 pairs at R800 = R336,000
     • 5 January 2021: 810 pairs at R950 = R769,500
   • Total purchases = R459,200 + R336,000 + R769,500 = R1,564,700.

2. Account for Returns: The returns for 60 pairs from the September purchase mean we must reduce our total purchases by the returned amount:

   • Return from 60 pairs at R800 per unit = R48,000.
   • Adjusted purchases = R1,564,700 - R48,000 = R1,516,700.

3. Calculate Total Stock Available for Sale: Add the inventory at the beginning of the period (1 March 2020) to the adjusted total purchases.

   • Inventory at start = R101,090 (for 206 pairs).
   • Total available = R101,090 + R1,516,700 = R1,617,790.

4. Calculate Closing Stock: The closing stock as of 28 February 2021 consists of 420 pairs.

   • The total units available after accounting for sales (2,216 sold) is:

     $ext{Total Units Available} = ext{Total Pairs} - ext{Sold Pairs} = 206 + 1,516,700 ÷ ext{Average Unit Cost} − 2,216$

5. Weighted Average Cost per unit: Average unit cost can be found using:

   • Average cost per unit = Total Cost / Total Pairs = R1,617,790 / (206 + 1,516,700 ÷ Average Cost).

6. Value of Closing Stock: Finally, the value of the closing stock can be calculated using the average cost multiplied by the closing unit's total.

   Therefore, Total Value of Closing Stock = R373,800.