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The total cost of gods available for sale with a company during the current years is Rs. 12,00,000 and the total sales during the period are Rs. 13,00,000. If the gross profit margin of the company is 331 /3% on cost, the closing inventory during the current year is
- a)Rs. 4,00,000
- b)Rs. 3,00,000
- c)Rs. 2,25,000
- d)Rs. 2,60,000
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
The total cost of gods available for sale with a company during the cu...
Purchase Rs. 12,00,000, Sales Rs. 13,00,000, Gross profit 33 1/3% of Cost
Because we do not know the cost of goods sold, we have to derive that figure (cost of goods sold) to arrive at the figure of Gross Profit.
Alternatively we can calculate gross profit by finding out the Gross Profit % on sales from the Gross Profit % on cost.
33 1/3% of Cost => 25% of Sales (Or) 1/3 of Cost => 1/4 of sales
Opening Stock + Net Purchases - (Net Sales - Gross Profit) - Abnormal Loss = Closing Stock
Opening Stock + Net Purchases = 12,00,000, Net Sales = 13,00,000, Gross Profit = Net Sales * 25%
Opening Stock + Net Purchases - (Net Sales - Gross Profit) - Abnormal Loss = Closing Stock
==>12,00,000 - [13,00,000 - (13,00,000 * 25%)] = Closing stock
==>12,00,000 - [13,00,000 - 3,25,000] = Closing stock
==>12,00,000 - 9,75,000 = Closing stock
==>Closing stock = 2,25,000
Most Upvoted Answer
The total cost of gods available for sale with a company during the cu...
Closing inventory can be calculated using the formula:
Closing Inventory = Opening Inventory + Purchases - Cost of Goods Sold
Given:
Total cost of goods available for sale = Rs. 12,00,000
Total sales during the period = Rs. 13,00,000
Gross profit margin on cost = 331/3%
Step 1: Calculate the cost of goods sold (COGS)
Gross profit margin on cost = Gross profit / Cost of Goods Sold * 100
331/3% = Gross profit / COGS * 100
331/3% = Gross profit / (Total cost of goods available for sale - Closing Inventory) * 100
Let's assume the closing inventory to be "x".
331/3% = Gross profit / (12,00,000 - x) * 100
331/3 * (12,00,000 - x) = Gross profit
(331/3) * (12,00,000 - x) = (13,00,000 - 12,00,000) * 100
(331/3) * (12,00,000 - x) = 100000 * 100
331 * (12,00,000 - x) = 10000000
3972000 - 331x = 10000000
331x = 10000000 - 3972000
331x = 6028000
x = 6028000 / 331
x = 18,200
Step 2: Calculate the closing inventory
Closing Inventory = Opening Inventory + Purchases - COGS
Given that opening inventory and purchases are not provided in the question, we can assume that they cancel each other out.
Closing Inventory = Rs. 18,200
Therefore, the closing inventory during the current year is Rs. 18,200.
The correct answer given in the options is Rs. 2,25,000, which is different from the calculated value. Thus, the given answer seems to be incorrect.
Closing Inventory = Opening Inventory + Purchases - Cost of Goods Sold
Given:
Total cost of goods available for sale = Rs. 12,00,000
Total sales during the period = Rs. 13,00,000
Gross profit margin on cost = 331/3%
Step 1: Calculate the cost of goods sold (COGS)
Gross profit margin on cost = Gross profit / Cost of Goods Sold * 100
331/3% = Gross profit / COGS * 100
331/3% = Gross profit / (Total cost of goods available for sale - Closing Inventory) * 100
Let's assume the closing inventory to be "x".
331/3% = Gross profit / (12,00,000 - x) * 100
331/3 * (12,00,000 - x) = Gross profit
(331/3) * (12,00,000 - x) = (13,00,000 - 12,00,000) * 100
(331/3) * (12,00,000 - x) = 100000 * 100
331 * (12,00,000 - x) = 10000000
3972000 - 331x = 10000000
331x = 10000000 - 3972000
331x = 6028000
x = 6028000 / 331
x = 18,200
Step 2: Calculate the closing inventory
Closing Inventory = Opening Inventory + Purchases - COGS
Given that opening inventory and purchases are not provided in the question, we can assume that they cancel each other out.
Closing Inventory = Rs. 18,200
Therefore, the closing inventory during the current year is Rs. 18,200.
The correct answer given in the options is Rs. 2,25,000, which is different from the calculated value. Thus, the given answer seems to be incorrect.
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Community Answer
The total cost of gods available for sale with a company during the cu...
Option C
Since Gross profit on cost is 33.3333% therefore Gross profit on sale wil be 25%
1200000-(1300000-25%)
1200000-975000
225000
Since Gross profit on cost is 33.3333% therefore Gross profit on sale wil be 25%
1200000-(1300000-25%)
1200000-975000
225000
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The total cost of gods available for sale with a company during the current years is Rs. 12,00,000 and the total sales during the period are Rs. 13,00,000. If the gross profit margin of the company is 331 /3% on cost, the closing inventory during the current year isa)Rs. 4,00,000b)Rs. 3,00,000c)Rs. 2,25,000d)Rs. 2,60,000Correct answer is option 'C'. Can you explain this answer?
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The total cost of gods available for sale with a company during the current years is Rs. 12,00,000 and the total sales during the period are Rs. 13,00,000. If the gross profit margin of the company is 331 /3% on cost, the closing inventory during the current year isa)Rs. 4,00,000b)Rs. 3,00,000c)Rs. 2,25,000d)Rs. 2,60,000Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The total cost of gods available for sale with a company during the current years is Rs. 12,00,000 and the total sales during the period are Rs. 13,00,000. If the gross profit margin of the company is 331 /3% on cost, the closing inventory during the current year isa)Rs. 4,00,000b)Rs. 3,00,000c)Rs. 2,25,000d)Rs. 2,60,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The total cost of gods available for sale with a company during the current years is Rs. 12,00,000 and the total sales during the period are Rs. 13,00,000. If the gross profit margin of the company is 331 /3% on cost, the closing inventory during the current year isa)Rs. 4,00,000b)Rs. 3,00,000c)Rs. 2,25,000d)Rs. 2,60,000Correct answer is option 'C'. Can you explain this answer?.
The total cost of gods available for sale with a company during the current years is Rs. 12,00,000 and the total sales during the period are Rs. 13,00,000. If the gross profit margin of the company is 331 /3% on cost, the closing inventory during the current year isa)Rs. 4,00,000b)Rs. 3,00,000c)Rs. 2,25,000d)Rs. 2,60,000Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The total cost of gods available for sale with a company during the current years is Rs. 12,00,000 and the total sales during the period are Rs. 13,00,000. If the gross profit margin of the company is 331 /3% on cost, the closing inventory during the current year isa)Rs. 4,00,000b)Rs. 3,00,000c)Rs. 2,25,000d)Rs. 2,60,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The total cost of gods available for sale with a company during the current years is Rs. 12,00,000 and the total sales during the period are Rs. 13,00,000. If the gross profit margin of the company is 331 /3% on cost, the closing inventory during the current year isa)Rs. 4,00,000b)Rs. 3,00,000c)Rs. 2,25,000d)Rs. 2,60,000Correct answer is option 'C'. Can you explain this answer?.
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The total cost of gods available for sale with a company during the current years is Rs. 12,00,000 and the total sales during the period are Rs. 13,00,000. If the gross profit margin of the company is 331 /3% on cost, the closing inventory during the current year isa)Rs. 4,00,000b)Rs. 3,00,000c)Rs. 2,25,000d)Rs. 2,60,000Correct answer is option 'C'. Can you explain this answer?, a detailed solution for The total cost of gods available for sale with a company during the current years is Rs. 12,00,000 and the total sales during the period are Rs. 13,00,000. If the gross profit margin of the company is 331 /3% on cost, the closing inventory during the current year isa)Rs. 4,00,000b)Rs. 3,00,000c)Rs. 2,25,000d)Rs. 2,60,000Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of The total cost of gods available for sale with a company during the current years is Rs. 12,00,000 and the total sales during the period are Rs. 13,00,000. If the gross profit margin of the company is 331 /3% on cost, the closing inventory during the current year isa)Rs. 4,00,000b)Rs. 3,00,000c)Rs. 2,25,000d)Rs. 2,60,000Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
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