Question

Opening Stock	Rs. $5,000$
Purchases	Rs. $15,000$
Direct Expenses	Rs. $2,000$
Closing Stock	Rs, $2,500$

Cost of goods sold$=?$

• A. Rs. $20,000$
• B. Rs. $19,500$
• C. Rs. $21,500$
• D. Rs. $22,000$

Answer 1

Answer: (B)

Rs. $19,500$

Cost of goods sold is the amount of money the company spent on labor, materials, and overhead to manufacture or purchase products that were sold to the customers during the year.

Cost of Goods Sold = Beginning Inventory + Purchases + Direct Expenses - Ending Inventory

= Rs. 5,000 + Rs. 15,000 + Rs. 2,000 - Rs. 2,500

= Rs. 19,500