Question

KT limited having its head office at delhi invoiced goods to its branch at ludhiana at 20% less than the list price which is cost plus 100%. the cash sales were to be made at invoice price and credit sales at list price .

Answer 1

Answer:

Explanation:

Suppose cost price = Rs.100. list price = Rs.100 +Rs.100= Rs.200,Invoice  price = Rs.200 - 20 % =160

1. Invoice price of goods sent = Rs.62500 * 160 /100

= 1,00,000

2. Goods in transit = Goods sent - goods received

= 100000 - 96000

= 4000

3. Invoice price of goods sold

= Rs. 80000 *160 /100= Rs. 64000

4. Value of closing stock = opening stock + goods sent  - goods in transit - l.p of goods sold=

32000 + 100000 -4000 - 64000

= 64000

5. Cost of goods sold = 1,70,000 *100/200

= 85000

6. Value of closing stock at cost price

= Opening stock + purchase  - goods sent - cost of goods sold

= 40000 + 2,00,000  - 62500 - 85000

= 92500

7. Opening stock reserve

= 32000 * 60 /160

= 12000