At the time of valuing inventory as on 31st March 2022, a sum of ₹12,500 was written off on a particular item, which was originally purchased for ₹50,000 and was sold during the year for ₹40,000

Shivansh · 31 Jul 2024

Total Cost of Goods Available for Sale: = Opening Stock + Purchases + Manufacturing Expenses = ₹1,47,500 + ₹8,85,000 + ₹1,35,000 = ₹11,67,500 Gross Profit on Cost: = Total Cost of Goods Available for Sale * Gross Profit Rate = 11,67,500 * 25% (0.25) = 2,91,875 Now, to find the Closing Stock, we subtract the Cash Sales and Credit Sales from the Cost of Goods Available for Sale: Closing Stock = Cost of Goods Available for Sale - (Cash Sales + Credit Sales) = ₹11,67,500 - (₹5,50,000 + ₹4,00,000) = 11,67,500 - ₹9,50,000 = 2,17,500