Multiple choice

Consider the following data pertaining to H Ltd. for March 2016: Opening inventory is Rs. 1,80,000 Closing inventory is Rs. 90,000 The company made purchases amounting to Rs. 3,30,000 on credit during the month. The company paid an amount of Rs. 3,50,000 to the suppliers during the month. The goods are sold at 25% above cost.

What is the amount of sales for March 2016?

  1. Rs. 4,12,500

  2. Rs. 5,25,000

  3. Rs. 90,000

  4. Rs. 3,15,000

  5. Rs. 5,50,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Cost of goods sold = Opening stock + Purchases - Closing stock COGS = 1,80,000 + 3,30,000 - 90,000 COGS = Rs. 4,20,000 Gross profit = 4,20,000*25% = Rs. 1,05,000 Cost of goods sold + Gross profit = Sales 4,20,000 + 1,05,000 = Sales Hence, sales = 5,25,000

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