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The total cost of goods available for sale with a company during the current year is Rs. 12,00,000 and total sales during the period is Rs. 13,00,000.  If the gross profit margin of the company is % 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?
Verified Answer
The total cost of goods available for sale with a company during the c...
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 = Rs. 2,25,000
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Most Upvoted Answer
The total cost of goods available for sale with a company during the c...
1/3 on cost = 1/4 on sale 1300000/4=325000 (GP) now prepare trading a/c and find the closing stock....
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Community Answer
The total cost of goods available for sale with a company during the c...
Gross margin = 100% + 33.33% = 133.33%.
Cost price of the goods sold = Rs.13,00,000 X 100/133.33 = Rs.9,75,000.
Cost price of the goods available for sale = Rs.12,00,000.
Closing inventory = Cost price of the goods available for sale - cost price of the goods sold = Rs.(12,00,000 - 9,75,000) = Rs.2,25,000.
Hence, the correct option is C.
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The total cost of goods available for sale with a company during the current year is Rs. 12,00,000 and total sales during the period is Rs. 13,00,000. If the gross profit margin of the company is % 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 goods available for sale with a company during the current year is Rs. 12,00,000 and total sales during the period is Rs. 13,00,000. If the gross profit margin of the company is % 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 goods available for sale with a company during the current year is Rs. 12,00,000 and total sales during the period is Rs. 13,00,000. If the gross profit margin of the company is % 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 goods available for sale with a company during the current year is Rs. 12,00,000 and total sales during the period is Rs. 13,00,000. If the gross profit margin of the company is % 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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