Question

Goods purchased ` 1,00,000. sales ` 90,000. margin 20% on cost. closing inventory = ?

Answer 1

if cost is 100 then margin is 20 and sales is 100 + 20 = 120/-
therefore cost of sales = 90000 x 100/120 = 75000/-
closing inventory = purchases - cost of sales = 100000 - 75000 = 25000