Question

18.Find out opening stock from the following closing stock=rs230
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Answer 1

Answer:

Accounting Equation to find out the cost of goods sold is :

Cost of Goods sold = Opening stock + Purchases - Closing Stock

Gross Profit earned is 25% on cost.

Let us assume cost is Rs.100

GP will @25% on cost i.e. Rs.25

Hence sales becomes cost of goods sold + Profit i.e. Rs.100 + Rs.25= Rs.125

Therefore Gross Profit on sales will be = Gross Profit / Sales * 100

Profit on sales = Rs.25 / Rs.125 * 100 i.e 20% on Sales

In the given problem Sales is Rs. 522000

Hence Gross Profit will be 20% of Rs.522000 i.e. Rs.104400

Cost of Goods Sold = Rs.522000 - Rs.104400

Cost of goods sold = Rs.417600

Therefore

Rs.417600 = Rs.70000 + Rs.416000 - Closing stock

Closing stock = Rs.486000 - Rs.417600

Closing Stock = Rs.68400

Explanation:

It is simple