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%

A 27500 Correct Answer Incorrect Answer
B 21250 Correct Answer Incorrect Answer
C 15000 Correct Answer Incorrect Answer
D 10000 Correct Answer Incorrect Answer
E 12250 Correct Answer Incorrect Answer

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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