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Cost of goods available for sale Rs.1,00,000
Total Sales Rs.80,000
Opening inventory of goods Rs.20,000
Gross profit margin 25%
Closing inventory of goods for the year 2009-10 was ?
a) Rs.80,000
b) Rs.60,000
c) Rs.40,000
d) Rs.36,000
The closing inventory of Rs, pretty much cancels out with the profits (% of Rs,=Rs,). That if the sales is deducted from the 'cost of goods for sale' (Rs1,,).
However, if we look at sales of Rs, as revenue (profits included). Then actual goods sold bear a cost of,. I which case, the opening inventory is Rs, (Op C).
the correct answer for this question is0
Option C0 is the correct answer.
Cost of goods avaialable for sale (incl. opening balance)
Less: COGS = (0 x%) (0)
Closing Inventory 0
c) Rs,40,000................................................................................................................................................
The answer is option (c). Closing stock of the data provided by you can be found by developing a cost of goods sold (COGS) statement and calculating cost of good sold by using the formula of gross profit margin. The first step is developing the cost of goods sold (COGS) statement, which will go this way: - COGS = cost of goods available for sale - closing stock. Now in this equation, we have three quantities but have the data available for one quantity and that is the cost of goods available for sale. Here we can determine another variable in the equation, i.e. COGS by using Gross Profit Margin Formula. Now, Gross Profit Margin = (Revenue - COGS) / revenue. By putting values we get,25% = (80,000 - COGS) /80,000. After simplification the result would be, COGS =60,000. So, by using gross profit margin formula we got the second variable to use in the formula of cost of goods sold. Now, by putting the two variables, i.e. COGS and cost of goods available for sale in the given equation we can determine the closing stock. So, we will put the available quantities in the given equation. COGS = cost of goods available for sale - closing stock. By putting values we will get, 60,000 =1,00,000 - closing stock. After simplification the net result would be, closing stock =40,000. So, the answer to the given question is (C). I hope this is the answer of your question.
Gross profit margin 25% so80,000*25%=20,000
Cost of goods sold=60,000
Closing Stock=(Cost of goods available for Sale(Opening Stock+for year purchase)-Cost of goods sold)=100,000-60,000=40,000
So answer would be:
c) Rs.40,000
The right Answer is Option C. (Cost of Goods Available for Sale _ Closing Stock = cost of Goods Sold)
Cost of Goods Sold=80000*25/100=20000 Gross Profit. if Gross Profit is20000 Then Cost will be ()=60000 Therefore Putting60000 at place of Cost of Goods Sold in the above Equation so then we Get40000
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