Question

Opening Stock Rs. 1,00,000, Sales Rs. 5,00,000, Gross profit @ 25% on cost, Purchase Rs. 6,00,000. Closing Stock is ___________.

• A. Rs. 1,25,000
• B. Rs. 2,25,000
• C. Rs. 3,00,000
• D. Rs. 3,25,000

Answer 1

The correct option is C Rs. 3,00,000

Closing stock = (Opening stock + purchases + gross profit) - sales

= (1,00,000 + 6,00,000 + 1,00,000)- 5,00,000

= 8,20,000 - 5,00,000

= 3,00,000

Working note:- Calculation of gross profit

(Gross profit is 25% of cost because we don't have cost we will calculate it with the help of sales)

If cost is 100 gross profit is 25% of cost then sale will be Gross profit + cost

Hence 100 +25 = 125

therefore,

gross profit = 25/125 x 5,00,000

= 1,00,000