Question

5. a) Average stock of a firm is Rs 40000.its opening stock is Rs 5000 less than the closing
stock. Calculate opening and closing stock amounts.​

Answer 1

Answer:

Stock turnover ratio = Cost of goods sold/Average inventory

6 = Cost of goods sold/ 8000

Cost of goods sold = Rs.48000

Selling price = 25 % above cost

Therefore Gross profit = Cost of goods sold x 25%

= 48000 x 25%

= Rs.12000