Question

From the following information, find out the missing information.
Opening stock - Rs. $50,000$, Closing stock - Rs. $1,50,000$, Sale - Rs. $16,00,000$, Gross profit ratio is $25\%$ on sales. Purchases $=$?

• A. Rs. $10,00,000$
• B. Rs. $11,50,000$
• C. Rs. $9,50,000$
• D. Rs. $13,00,000$

Answer 1

The correct option is D Rs. $13,00,000$

This can be simplified as:

Cost of goods sold = Sales - Gross Profit

= Rs.1600000 - 25% of Rs.1600000

= Rs.1600000 - Rs.400000

= Rs.1200000

Another way to represent cost of goods sold is

Op stock+ Purchases-Closing stock= Cost of goods sold

Rs.50000+Purchases-Rs.150000=Rs.1200000

Rs.50000-Rs.150000+Purchases=Rs.1200000

Rs.-100000+Purchases=Rs.1200000

Purchases=Rs.1300000.