Question

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

Answer 2

Explanation:

Solution :

Average Stock of a firm = Rs 40,000

Opening Stock = Rs. 5,000 less than the Closing Stock

Amount of Opening Stock and Closing Stock = ??

Let,

• Opening Stock = x
• Closing Stock = x + 5,000

Average stock = Rs. 40,000

⇒ $40,000 \: = \: \dfrac{ x \: + \: (x \: + \: 5,000)}{2}$

⇒ 40,000 × 2 = x + (x + 5,000)

⇒ 80,000 = 2x + 5,000

⇒ 80,000 - 5,000 = 2x

⇒ 75,000 = 2x

⇒ x = 75,000/2

⇒ x = 37,500

Opening Stock = Rs. 37,500

• Closing Stock = x + 5,000

⇒ 37,500 + 5,000

⇒ 42,500

Closing Stock = Rs. 42,500

Therefore,

• Opening Stock = Rs. 37,500
• Closing Stock = Rs. 42,500