Multiple choice

The books of T Ltd. revealed the following information: Opening inventory is Rs. 6,00,000 Purchases during the year 2014-15 are Rs. 34,00,000 Sales during the year 2014-15 are Rs. 48,00,000 On March 31, 2015, the value of inventory as per physical inventory taking was Rs. 3,25,000. The company's gross profit on sales has remained constant at 25%. The management of the company suspects that some inventory might have been pilfered by a new employee.

What is the estimated cost of missing inventory?

  1. Rs. 75,000

  2. Rs. 25,000

  3. Rs. 1,00,000

  4. Rs. 1,50,000

  5. Rs. 50,000
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A Correct answer
Explanation

Gross profit = 48,00,000*25% = Rs. 12,00,000 Closing inventory = Opening stock + Purchases + Gross profit - Sales  Closing inventory = 6,00,000 + 34,00,000 + 12,00,000 - 48,00,000 Closing stock = Rs. 4,00,000 Value of missing inventory = Closing inventory as per books - Value of closing inventory (according to physical verification)                                                  = 4,00,000 - 3,25,000 = Rs. 75,000

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