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Consider the following for Alpha Co. for the year 2009-10:?

Cost of goods available for sale   Rs.1,00,000

Total Sales  Rs.80,000

Opening inventory of goods  Rs.20,000

Gross profit margin  25%  

 

Closing inventory of goods for the year  2009-10  was ?

 

a) Rs.80,000

b) Rs.60,000

c) Rs.40,000

d) Rs.36,000

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Question ajoutée par Shamseer KM , Accounts and Admin Payroll , KBM Group
Date de publication: 2015/09/04
Samik Dutta
par Samik Dutta , Business Manager , Pulsar Muhendislik Turkey

The closing inventory of Rs, pretty much cancels out with the profits (% of Rs,=Rs,). That if the sales is deducted from the 'cost of goods for sale' (Rs1,,).

However, if we look at sales of Rs, as revenue (profits included). Then actual goods sold bear a cost of,. I which case, the opening inventory is Rs, (Op C).

ADITYA SHARMA
par ADITYA SHARMA , Manager , DELOITTE AND TOUCHE

the  correct answer for this question is0

Sadiq ul Islam
par Sadiq ul Islam , Financial Controller , BinDawood Holding Company (BDH)

Option C0 is the correct answer.

Cost of goods avaialable for sale (incl. opening balance)  

Less: COGS = (0 x%)                                                      (0)

Closing Inventory                                                                              0

Utilisateur supprimé
par Utilisateur supprimé

c) Rs,40,000................................................................................................................................................

 

Utilisateur supprimé
par Utilisateur supprimé

The answer is option (c). Closing stock of the data provided by you can be found by developing a cost of goods sold (COGS) statement and calculating cost of good sold by using the formula of gross profit margin. The first step is developing the cost of goods sold (COGS) statement, which will go this way: - COGS =  cost of goods available for sale - closing stock. Now in this equation, we have three quantities but have the data available for one quantity and that is the cost of goods available for sale. Here we can determine another variable in the equation, i.e. COGS by using Gross Profit Margin Formula. Now, Gross Profit Margin = (Revenue - COGS) / revenue. By putting values we get,25% = (80,000 - COGS) /80,000. After simplification the result would be, COGS =60,000. So, by using gross profit margin formula we got the second variable to use in the formula of cost of goods sold. Now, by putting the two variables, i.e. COGS and cost of goods available for sale in the given equation we can determine the closing stock. So, we will put the available quantities in the given equation. COGS = cost of goods available for sale - closing stock. By putting values we will get, 60,000 =1,00,000 - closing stock. After simplification the net result would be, closing stock =40,000. So, the answer to the given question is (C). I hope this is the answer of your question.

Sohaib Lodhi
par Sohaib Lodhi , Financial & Operational Analyst , Rely Industries FZCO

Gross profit margin  25% so80,000*25%=20,000

Cost of goods sold=60,000

Closing Stock=(Cost of goods available for Sale(Opening Stock+for year purchase)-Cost of goods sold)=100,000-60,000=40,000

So answer would be:

c) Rs.40,000

shadman daud daud
par shadman daud daud , Accounting&Finance Officer , Debor

The right Answer is Option C.  (Cost of Goods Available for Sale _ Closing Stock = cost of Goods Sold)

                                                       Cost of Goods Sold=80000*25/100=20000 Gross Profit. if Gross Profit is20000 Then Cost will be ()=60000 Therefore Putting60000 at place of Cost of Goods Sold in the above Equation  so then we Get40000

 

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