Question

From the following particulars, ascertain the value of Opening Stock:-

	₹		₹
Purchases	60,000	Wages	3,000
Sales	1,05,000	Carriage Outwards	1,200
Closing Stock	20,000	Rate of Gross Profit on cost of goods sold	50%

Answer 1

Rate of Gross Profit (on cost) = 50%

Rate of Gross Profit (on sales) = 33.33%

Gross Profit = 33.33% of (1,05,000) = 35,000

Gross Profit = Net Sales – Cost of Goods Sold

35,000 = 1,05,000 – Cost of Goods Sold

Cost of Goods Sold = 1,05,000 – 35,000 = ₹ 70,000

Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

70,000 = Opening Stock + 60,000 + 3,000 – 20,000

Opening Stock = 70,000 – 60,000 – 3,000 + 20,000 = ₹ 27,000