CMA Intermediate · Financial Accounting · Financial Statements from Incomplete Records
Meena Stores sells goods at cost plus 25%. Opening stock was ₹60,000, purchases ₹4,40,000 and sales ₹5,00,000. Closing stock at cost is:
Closing stock at cost is ₹1,00,000. A 25% markup makes cost of goods sold 5,00,000 divided by 1.25, which is ₹4,00,000. Goods available were ₹5,00,000, so the unsold balance is ₹1,00,000. Treating 25% as margin on sales gives a wrong answer.
- A₹1,00,000Correct
- B₹40,000
- C₹1,25,000
- D₹1,10,000
Explanation
Cost of sales = 5,00,000 / 1.25 = ₹4,00,000. Goods available = 60,000 + 4,40,000 = 5,00,000. Closing stock = 5,00,000 - 4,00,000 = ₹1,00,000. Using 25% of sales as profit gives cost 3,75,000 and stock 1,25,000, which is wrong.
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