From the following information find the value of closing stock — Stock velocity: 6 months Gross profit ratio: 25% Gross profit for the year ended 31st March 2014: ₹1,00,000 Closing stock for the period - ₹20,000 more tha
CS Executive · Cost and Management Accounting · PYQS · December 2014
From the following information find the value of closing stock — Stock velocity: 6 months Gross profit ratio: 25% Gross profit for the year ended 31st March 2014: ₹1,00,000 Closing stock for the period - ₹20,000 more than it was in the beginning of the year.
Answer & Explanation:
Correct Answer: Option (C)
Correct answer: (C) ₹1,60,000. Sales = 1,00,000/25% = 4,00,000; cost of sales = 3,00,000. Six-month stock velocity implies average stock 1,50,000. With closing stock 20,000 above opening, closing stock = 1,60,000.
Topics: Financial Statement Analysis
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