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beginning inventory +purchasing + freight - ending inventory = COGS
because the sales markup based on cost
COGS =900000/1.25=720000
thus beginning inventory equal
-25000 +70000
beginning inventory equal75000
Seventy five thousand only..
SALES + CLOSING INVENTORY = OPENING INVENTORY + PURCHASES + INWARD EXP. + GROSS PROFIT
I.E.
OPENING INVENTORY= SALES+ CLOSING INVENTORY-PURCHASES - INWARD EXP -GROSS PROFIT
=900000+70000 -690000 -25000 -180000
=75000
GROSS PROFIT IS =20% ON SALES
Beginning inventory:75000
Well i guess it can be calculated as follows:
Open= (COGS+ Ending inventory)-(Purchases+Carriage in+Opening)
So
Cost of goods Sold=900000*100/125=720000
+
Ending inventory=70000
Opening inventory=790000-() =75000
Yes,75000 is the right answer .................
Opening inventory +purchasing + freight - closing inventory = cost of sale. The markup is based on cost
So
Cost of sale =900,000/1.25=720,000
thus op inventory equal
-25000 +70000
op inventory equal to75000
Sale 900,000
COGS
Opening Inv. 75,000 (Working Figure)
Purchases 690,000
Frieght Inward 25,000
Closing Inv. (70,000)
COGS (720,000) (900,000/1.25) Markup
Gross Profit 180,000
So, the ans is75,000.
Beginning inventory=(70000+720000)-(690000+25000)
I AGREE WITH YOUR ANSWER MR AHMED
opening stock of the above question is75000
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