Question

Calculate the value of Opening Stock from the following:

	₹
Sales	2,05,000
Sales Returns	5,000
Purchases	1,24,000
Purchases Returns	4,000
Carriage Inwards	8,000
Closing Stock	36,000
Rate of Gross Profit on Sales	40%

Answer 1

Rate of Gross Profit (on sales) = 40%
Gross Profit = 40% of (2,05,000 – 5,000) = 80,000
Gross Profit = Net Sales – Cost of Goods Sold
80,000 = 2,00,000 – Cost of Goods Sold
Cost of Goods Sold = 2,00,000 – 80,000 = ₹ 1,20,000
Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock
1,20,000 = Opening Stock + (1,24,000 – 4,000) + 8,000 – 36,000
Opening Stock = 1,20,000 – 1,20,000 – 8,000 + 36,000 = ₹ 28,000