Question

Undervaluation of closing stock by 20% and closing stock was ₹ 50,000.

Find out the value of closing stock.​

Answer 1

Answer: Rs. 62,500

Step by step Explanation:

Given:

Undervaluation of closing stock = 20%

Closing stock = Rs. 50,000

To Find: Value of Closing stock.

Revised Value =${\tt{\frac{Book \: value}{100 \: - \: \% \: of \: undervaluation}}} \times 100$

${\tt = \frac{50,000}{100 - 20}} \times 100$

$\tt = \frac{50,000}{80} \times 100$

$\tt= 625 \times 100$

$\tt = 62,500$

Value of Closing Stock is Rs. 62,500.