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Question

The cost of inventory as per physical verification as on 24th March was Rs.4,00,000. Goods are sold at a profit of 25% on cost .
On 27th March, goods costing Rs.2,00,000 were received for sale on consignment basis . 80% of these goods had been sold on 31st March.
The cost of inventory as per book is ______________.

A
Rs.4,00,000
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B
Rs.3,36,000
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C
Rs.2,72,000
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D
None of these
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Solution

The correct option is C Rs.2,72,000
Cost of inventory as per physical inventory 4,00,000
Less:- Goods not sold till 24th march (WN 1) 1,28,000
----------------
Cost of inventory as per books 2,72,000

Working note:-
1) Calculation of cost of unsold goods
= 2,00,000 x 80% = 1,60,000 (Sales value)
= 1,60,000 x 100/125
= 1,28,000

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