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?
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?
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.