Question
Consider the following for Q Co. for the year
2021-22: • Cost of goods available for sale: ₹1,00,000 • Total sales: ₹80,000 • Opening inventory: ₹20,000 • Gross profit margin on sales: 25% Closing inventory of goods for the year 2021-22 is:Solution
Gross profit = 25% of ₹80,000 = ₹20,000 Cost of goods sold (COGS) = ₹80,000 – ₹20,000 = ₹60,000 Closing inventory = Cost of goods available for sale – COGS = ₹1,00,000 – ₹60,000 = ₹40,000
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