Question

A business has compiled the following information for the year ended 31st March, 2018:

Particulars	Rs.
Opening Stock	5,00,000
Sales	12,00,000
Purchases	10,00,000

The gross profit as a percentage of sales is 25% on sales.
Based on these figures, what is the amount of closing stock as at the end of the year?

• A. Rs. 6,00,000
• B. Rs. 5,00,000
• C. Rs. 7,00,000
• D. None of these

Answer 1

The correct option is A

Rs. 6,00,000

Gross profit
= $Rs.12,00,000\times \frac{25}{100}$ = Rs. 3,00,000

Closing Stock
= Opening Stock + Purchases + Gross Profit - Sales

= Rs. 5,00,000 + Rs. 10,00,000 + Rs. 3,00,000 - Rs. 12,00,000

= Rs. 6,00,000