Question

determine cost of goods sold from the following opening stock 8500 purchases 30700 direct expenses 4,800 indirect expenses 5200 closing stock 9,000​

Answer 1

Answer:

Cost of goods sold is the amount of money the company spent on labor, materials, and overhead to manufacture or purchase products that were sold to the customers during the year.

Cost of Goods Sold = Beginning Inventory + Purchases + Direct Expenses - Ending Inventory

= Rs. 8,500 + Rs. 30,700 + Rs. 4,800 - Rs. 9,000

= Rs. 35,000

Answer 2

ANSWER :

• ❖ If Opening Stock is Rs. 8,500; Purchases is Rs. 30,700; Direct Expenses is Rs. 4,800; Indirect Expenses is Rs. 5,200 and Closing Stock is Rs. 9,000; then Cost of Goods Sold is Rs. 35,000.

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SOLUTION :

❒ Given :-

• Opening Stock = Rs. 8,500

• Purchases = Rs. 30,700

• Direct Expenses = Rs. 4,800

• Indirect Expenses = Rs. 5,200

• Closing Stock = Rs. 9,000

❒ To Determine :-

• Cost of Goods Sold = ?

❒ Required Formula :-

• $\dag \: \: \underline{ \boxed{ \sf{ \: Cost \: \: of \: \: Goods \: \: Sold = O pening \: \: Stock + Net \: \: Purchases + Direct \: \: Expenses - Closing \: \: Stock \: }}}$

❒ Note :-

• ✎ While calculating Cost of Goods Sold, indirect expenses are not taken into account. Only the expenses of direct nature are taken into account

• ✎ As Purchase Returns is not mentioned in the question, we will consider the amount of Purchases as Net Purchase.

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❒ Calculation :-

Here,

• Opening Stock = Rs. 8,500

• Purchases = Rs. 30,700

• Direct Expenses = Rs. 4,800

• Closing Stock = Rs. 9,000

Substituting the values in the formula of COGS, we get,

• ★ Cost of Goods Sold = Opening Stock + Net Purchases + Direct Expenses - Closing Stock

⇒ Cost of Goods Sold = Rs. 8,500 + Rs. 30,700 + Rs. 4,800 - Rs. 9,000

⇒ Cost of Goods Sold = Rs. 44,000 - Rs. 9,000

∴ Cost of Goods Sold = Rs. 35,000

• Hence, the value of Cost of Goods Sold is Rs. 35,000.