Multiple choice

Consider the following for Q Co. for the year 2014-15: Cost of goods available for sale is Rs. 1,00,000 Total sales are Rs. 80,000 Opening inventory of goods is Rs. 20,000 Gross profit margin is 25% on sales

Ascertain the value of the closing inventory for the year ending 2014-15.

  1. Rs. 80,000

  2. Rs. 60,000

  3. Rs. 40,000

  4. Rs. 36,000

  5. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Sales = Rs. 80,000 Less: Profit margin = 1/4th of 80,000 = Rs. 20,000 COGS = Rs. 60,000 COGS = Cost of goods available for sale - Closing stock 60,000 = 100,000 - Closing stock Closing stock = Rs. 40,000

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