From the following information ascertain the value of stock as on 31.3.2019:
•Value of stock on 1.4.2018 is ₹70,000
•Purchases during the period from 1.4.2018 to 31.3.2019 is ₹ 3,46,000
•Manufacturing expenses during the above period is ₹ 70,000
•Sales during period is ₹5,22,000
At the time of valuing stock on 31.3.2018 a sum of ₹ 6000 was written off a particular item, which was originally purchased for ₹ 20,000 and was sold for ₹ 16,000, but for the above transaction the gross profit earned during the year was 25% on cost.
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Answers
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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:
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