Question

Calculate the value of opening stock from the following:
Cash Sales 2,00,000
Sales Return ( out of credit sales ) 25,000
Purchase Return 20,000
Closing stock 1,80,000
Credit Sales 8,25,000
Purchases 6,20,000
Carriage inwards 40,000
Rate of gross profit 40% on sales.
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Answer 1

Answer:

The value of Opening Stock is Rs 1,40,000

Explanation:

Solution :

Calculate the value of Opening Stock :

★ Total Net Sales = (Cash Sales + Credit Sales) - Sales Return

⇒ (2,00,000 + 8,25,000) - 25,000

⇒ 10,00,000

Net Sales = Rs 10,00,000

★ Gross Profit 40 % on sales :

⇒ 40 % of 10,00,000

⇒ 4,00,000

Gross Profit = Rs 4,00,000

★ As we know ,

★ Gross Profit = Net Sales - Cost of Goods Sold

⇒ 4,00,000 = 10,00,000 - Cost of Goods Sold

⇒ Cost of Goods Sold = 10,00,000 - 4,00,000

⇒ Cost of Goods Sold = 6,00,000

Cost of Goods Sold = Rs 6,00,000

★ Cost of Goods Sold = Opening Stock + (Purchases - Purchase Return) + Carriage Inwards - Closing Stock

⇒ 6,00,000 = Opening Stock + (6,20,000 - 20,000) + 40,000 - 1,80,000

⇒ 6,00,000 = Opening Stock + 6,00,000 + 40,000 - 1,80,000

⇒ 6,00,000 = Opening Stock + 4,60,000

⇒ 6,00,000 - 4,60,000 = Opening Stock

⇒ 1,40,000 = Opening Stock

Opening Stock = Rs 1,40,000

Therefore,

The value of Opening Stock is Rs 1,40,000