Question
Stock on 1st Jan = ₹1,00,000 Purchases =
₹2,50,000 Sales = ₹3,00,000 Gross Profit = 25% on sales Stock destroyed in fire on 30th June. Calculate claim amount if salvage value is ₹10,000.Solution
Gross Profit = 25% of ₹3,00,000 = ₹75,000 COGS = ₹3,00,000 – ₹75,000 = ₹2,25,000 Closing Stock = Opening + Purchases – COGS = ₹1,00,000 + ₹2,50,000 – ₹2,25,000 = ₹1,25,000 Loss = ₹1,25,000 – ₹10,000 (salvage) = ₹1,15,000
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