Question
Calculate the closing inventory from the following
information: · Purchases Rs.90,000 · Sales Rs.125,000 · Opening inventory Rs.25,000 · Gross profit on cost = 25%Solution
Gross profit on cost of 25% = Gross profit of 20% on sales Gross profit = 125000*20% = 25000 COGS = Sales – gross profit = 125,000-25,000 = 100,000 COGS = Opening inventory + purchases – closing inventory 100000 = 25000 +90000 – closing stock Or closing inventory = 15000
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