How To Calculate Ending Inventory Without Cost of Goods Sold

Here, we calculate the value of ending inventory / closing inventory without Cost of Goods Sold or Cost of Sales.

It is possible to calculate the value of closing inventory / stock if we are given opening inventory (beginning inventory) and average inventory.

Example: If we are given: Opening Inventory = Rs. 30000, Average Inventory = Rs. 20000, then find out closing Inventory / ending inventory for the current accounting period.

Given: Opening Inventory = Rs. 30000, Average Inventory = Rs. 20000

Find Out: Closing Inventory = ?

By Applying Average Inventory Formula, we get:

                           Average Inventory = (Opening Inventory + Ending Inventory) / 2

                                            20000 = (30000 + Ending Inventory) /2

                                           20000 X 2 = 30000 + Ending Inventory

                                          Ending Inventory = 40000 - 30000 = Rs. 10000

Hence closing stock or inventory at the end of the current accounting period is Rs. 10000 which is recorded on Income Statement as well as on balance sheet as a current asset on asset side of balance sheet.