Question

Q. 10. M of Delhi consigned 2,000 Telephone instruments at 100 each to N of
Hissar. The consignors paid freight 1,300; and insurance 300. N received only
1,800 sets and incurred the following expenses :
Octroi and other expenses 8,000; Cartage 2,000; Sales expenses *500. The
consignee sold 1,600 sets only. You are required to calculate the value of closing stock.
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Answer 1

Answer:

Rs. 4,260

Value of Closing Stock = Cost + Proportional Expenses = 20% [Rs. 20,000 + {Rs. 1,000(expense) + Rs. 200(freight) + Rs. 100(octroi)} = 20% [Rs. 20,000 + Rs. 1,300] = 20% (Rs. 21,300) = Rs. 4,260.

Note: Since 80% of the goods were sold, 20% of the goods remain as closing stock.