Question

R sends goods costing Rs. 1,00,000 to Y at 20% profit on invoice price. 1/10th of the goods were lost in transit. 1/2 of the balance goods were sold. Stock reserve on consignment stock will be ______ .

• A. Rs. 4,500
• B. Rs. 9,000
• C. Rs. 11,250
• D. Rs. 10,800

Answer 1

The correct option is C Rs. 11,250

Value of stock lost in transit $=$ Total stock $\times \frac{1}{10}$

$=$ $1,00,000\times \frac{1}{10}$

$=$ $10,000$

Value of remaining stock $=$ Total stock $-$ Stock lost in transit $-$ Stock sold

$=$ $1,00,000-10,000-4,500$

Stock reserve $=$ Remaining stock $\times \frac{20}{100}$

$=$ $45,000\times \frac{20}{100}$

$=$ $9,000$.