Question

Calculate Closing Stock from the following details:

	₹		₹
Opening Stock	20,000	Purchases	70,000
Cash Sales	60,000	Credit Sales	40,000
		Rate of Gross Profit on Cost $33\frac{1}{3}\%$

Answer 1

$\begin{array}{l}\text{Calculation of amount of Closing Stock}\\ \text{Gross Profit}=\text{33}\frac{\text{1}}{\text{3}}\text{\% on cost =}\frac{1}{3}\mathrm{rd}\mathrm{}\mathrm{on}\mathrm{}\mathrm{cost}\\ \therefore \text{Gross Profit on sales =}\frac{1}{4}\text{th on sales}\\ \text{And, Sales = Cash Sales + Credit Sales = 60,000+40,000 = Rs 1,00,000}\\ \text{So, Gross Profit =1,00,000}\times \frac{1}{4}=\text{Rs 25,000}\\ \text{Cost of Goods Sold}=\text{Sales}-\text{Gross Profit}\\ =\text{1,00,000}-\text{25,000}=\text{Rs 75,000}\\ \text{Cost of Goods Sold}=\text{Opening Stock}+\text{Purchases}+\text{Direct Expenses}-\text{Closing Stock}\\ \text{75,000}=\text{20,000}+\text{70,000}+\text{0}-\text{Closing Stock}\\ \text{Closing Stock}=\text{Rs 15,000}\end{array}$