Question

in working capital calculation when cost of goods sold is RS 1,50,000 p.a and finished goods are in stock for 15 days the amount to be invested in finished good is
a) 6250
b) 7500
c) 1,2500
d) 75,000​

Answer 1

Answer:

The amount invested in finished goods is ₹6,250

Explanation:

• Working capital is nothing but the actual difference between current assets and current liabilities
• Working capital is the immediate need for the company to handle the current situation
• Finished goods are the goods which are ready for the dispatch/delivery/Ready to use .
• The holding period of the finished goods is 15 days in the given problem.
• The amount invested in finished goods

= Cost of goods sold × Holding period of good

360 days

= 1,50,000×15/360

= 6,250

Answer 2

Answer:

The correct option is a) Rs 6250.

Explanation:

• The actual gap between current assets and current liabilities is all that working capital is.
• Working capital is what the business urgently needs to deal with the circumstances at hand.
• Finished goods are products that are prepared for use, delivery, or dispatch.
• In the example problem, the finished goods must be held for 15 days.
• The amount of which is invested in finished goods is the product of the cost of goods sold and the holding period of the good
• Amount invested in finished goods = 150000*15/360 = 6250

Rs 6250 has to be invested in the finished good.

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