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From the following information calculate cost of goods sold: Opening stock=₹40,000 Purchase=₹2,25,000 Closing stock=₹55,000?
Most Upvoted Answer
From the following information calculate cost of goods sold: Opening s...
Cost of goods sold =purchase +opening stock -closing stock.
2,25,000+40,000-55,000=2,10,000
2,25,000+40,000-55,000=2,10,000
Community Answer
From the following information calculate cost of goods sold: Opening s...
Calculation of Cost of Goods Sold
- Opening Stock: ₹40,000
- Purchases: ₹2,25,000
- Closing Stock: ₹55,000
Step 1: Calculation of Total Stock Available for Sale
Total Stock Available for Sale = Opening Stock + Purchases
Total Stock Available for Sale = ₹40,000 + ₹2,25,000 = ₹2,65,000
Step 2: Calculation of Cost of Goods Sold
Cost of Goods Sold = Total Stock Available for Sale - Closing Stock
Cost of Goods Sold = ₹2,65,000 - ₹55,000 = ₹2,10,000
Explanation
Cost of goods sold (COGS) is an essential component of any business's income statement. It represents the cost of producing or purchasing the goods that a company sells during a particular period. It is calculated by subtracting the cost of closing stock from the total stock available for sale.
In this case, the opening stock of ₹40,000 was added to the purchases of ₹2,25,000 to give a total stock available for sale of ₹2,65,000. The closing stock of ₹55,000 was then subtracted from this figure to give a cost of goods sold of ₹2,10,000.
Knowing the cost of goods sold is important as it allows a business to calculate its gross profit margin, which is the difference between the revenue generated by the sale of goods and the cost of producing or purchasing those goods. This information is then used to determine the profitability of the business and to make decisions about pricing, inventory management, and other operational matters.
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From the following information calculate cost of goods sold: Opening stock=₹40,000 Purchase=₹2,25,000 Closing stock=₹55,000?
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From the following information calculate cost of goods sold: Opening stock=₹40,000 Purchase=₹2,25,000 Closing stock=₹55,000? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about From the following information calculate cost of goods sold: Opening stock=₹40,000 Purchase=₹2,25,000 Closing stock=₹55,000? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for From the following information calculate cost of goods sold: Opening stock=₹40,000 Purchase=₹2,25,000 Closing stock=₹55,000?.
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