Prepare a stores ledger card using simple average method of material valuation.(8 marks)June/July 2020

A stores ledger card is a document used to record and track the movement of materials in a store or warehouse. The simple average method of material valuation is a method of calculating the average cost of a material by dividing the total cost of the material by the total quantity of the material.

To prepare a stores ledger card using the simple average method of material valuation, you will need to gather the following information:

1. Material name: The name of the material being tracked on the stores ledger card.
2. Material code: A unique code or identifier for the material, which is used to distinguish it from other materials.
3. Opening balance: The quantity and value of the material at the beginning of the period being tracked on the stores ledger card.
4. Receipts: The quantity and value of the material that was received during the period being tracked on the stores ledger card.
5. Issues: The quantity and value of the material that was issued or consumed during the period being tracked on the stores ledger card.
6. Closing balance: The quantity and value of the material at the end of the period being tracked on the stores ledger card.

To calculate the average cost of the material using the simple average method, you will need to divide the total cost of the material (opening balance + receipts – issues) by the total quantity of the material (opening balance + receipts – issues). The resulting average cost can then be used to value the material on the stores ledger card.

Overall, the stores ledger card is an important tool for tracking and managing materials in a store or warehouse, and the simple average method of material valuation can be a useful way to calculate the average cost of a material