Calculation of Closing Stock:

Given Information:
- Opening Stock: 38,000
- Purchases: 340,000
- Return Outward: 4,526
- Sales: 360,000
- Return Inward: 5,000
- Gross Loss: 20,000

Calculation:

1. Calculate the Net Purchases:
Net Purchases = Purchases - Return Outward
Net Purchases = 340,000 - 4,526
Net Purchases = 335,474

2. Calculate the Cost of Goods Available for Sale:
Cost of Goods Available for Sale = Opening Stock + Net Purchases
Cost of Goods Available for Sale = 38,000 + 335,474
Cost of Goods Available for Sale = 373,474

3. Calculate the Cost of Goods Sold:
Cost of Goods Sold = Cost of Goods Available for Sale - Closing Stock
Cost of Goods Sold = 373,474 - Closing Stock

4. Calculate the Gross Profit or Loss:
Gross Profit or Loss = Sales - Cost of Goods Sold
Gross Profit or Loss = 360,000 - Cost of Goods Sold

5. Calculate the Closing Stock:
Closing Stock = Cost of Goods Available for Sale - Cost of Goods Sold
Closing Stock = 373,474 - Cost of Goods Sold

6. Calculate the Gross Loss:
Gross Loss = Cost of Goods Sold - Closing Stock
Gross Loss = 20,000

Explanation:

- Opening Stock represents the value of inventory available at the beginning of the accounting period.
- Purchases represent the value of inventory purchased during the accounting period.
- Return Outward represents the value of inventory returned by the business to its suppliers.
- Sales represent the value of inventory sold during the accounting period.
- Return Inward represents the value of inventory returned to the business by its customers.
- Gross Loss represents the excess of the cost of goods sold over the sales revenue.
- Closing Stock represents the value of inventory remaining at the end of the accounting period.

To calculate the closing stock, we need to consider the opening stock, purchases, and return outward. By subtracting the return outward from the purchases, we get the net purchases. Adding the opening stock to the net purchases gives us the cost of goods available for sale.

To find the closing stock, we subtract the cost of goods sold from the cost of goods available for sale. The cost of goods sold is calculated by subtracting the closing stock from the cost of goods available for sale. Finally, the gross loss is calculated by subtracting the closing stock from the cost of goods sold.

In this case, the gross loss is given as 20,000. Therefore, we can calculate the closing stock by subtracting the gross loss from the cost of goods sold.