Question

opening inventory Rs.100000, sales Rs.300000, selling prince 33.33% on cost closing inventory Rs.275000, find out amount of purchase?

Answer 1

Answer:

Closing stock = (Opening stock + purchases + gross profit) - sales

= (1,00,000 + 6,00,000 + 1,00,000)- 5,00,000

= 8,20,000 - 5,00,000

= 3,00,000

Working note:- Calculation of gross profit

(Gross profit is 25% of cost because we don't have cost we will calculate it with the help of sales)

If cost is 100 gross profit is 25% of cost then sale will be Gross profit + cost

Hence 100 +25 = 125

therefore,

gross profit = 25/125 x 5,00,000

= 1,00,000