Following information is available relating to a manufacturing concern: Cost of Goods Sold Rs.245,000. Purchases Rs.250,000, Freight Inward Rs.5,000, Closing stock Rs.25,000. What will be the amount of Opening Stock?
Answer: Rs. 15,000
Explanation
To find the opening stock, use the following formula:
Opening Stock = Cost of Goods Sold - (Purchases + Freight Inward - Closing Stock)
Given:
- Cost of Goods Sold = Rs. 245,000
- Purchases = Rs. 250,000
- Freight Inward = Rs. 5,000
- Closing Stock = Rs. 25,000
Opening Stock = Rs. 245,000 - (Rs. 250,000 + Rs. 5,000 - Rs. 25,000)
Opening Stock = Rs. 245,000 - Rs. 230,000 = Rs. 15,000
So, the amount of opening stock is Rs. 15,000.
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