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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