Financial accounting

This query is : Open

Ishaan Agarwal (Querist)
Follow

28 November 2017 The Cost of Inventory of Rajasthali Ltd. as per physical verification as on 24th March, 2016 was `4,00,000. Goods are sold at a profit of 25% on cost. On 27th March, goods of the sale value of ` 1,00,000 were sent on sale on return basis to a customer, the period of approval being two weeks. He returned 20% of the goods and approved 80% of the remaining on 31st March. Calculate the Cost of Inventory as per Books.
Given Answer: Rs.3,48,800/-
My answer coming is Rs.336,000/-

Please help. Urgent Dec2017 CMA Exam.

RAJA P M

RAJA P M (Expert)
Follow

28 November 2017 Rs. 336,000.....

Message likes : 2 times

Ishaan Agarwal

Ishaan Agarwal (Querist)
Follow

28 November 2017 Mr Raja P M, but the correct answer given as per solution is Rs.348,800/-...How?

Message likes : 1 times

RAJA P M

RAJA P M (Expert)
Follow

28 November 2017 Ohh... please give your solution...

Message likes : 1 times

Ishaan Agarwal

Ishaan Agarwal (Querist)
Follow

28 November 2017 Mr. Raja, here is the solution given in the book (it's a 2 mark question):

4,00,000 – 80% [(80% of 1,00,000) – 20% 80,000] = `3,48,800

RAJA P M

RAJA P M (Expert)
Follow

28 November 2017 Very good explain... But, I'm different the calculation of my answer... Please wait I'm in outside. I'll give the Solution my view... Once again you ll be see the query....

Message likes : 2 times

RAJA P M

RAJA P M (Expert)
Follow

28 November 2017 Sorry for the late reply... How I calculate the sum.... The SALE VALUE Rs. 1lakh "SALE VALUE". I take it as billing value. 80000 * 25% = 20000 + 80000 = 100000... Stock in Hand Rs. 320,000 Material reversed 20% @ 16000 + 320,000 = 336,000.... We consider / understand the word of "SALE VALUE"....!!! Am I correct...??!

Message likes : 1 times

Ishaan Agarwal

Ishaan Agarwal (Querist)
Follow

28 November 2017 Thanks for replying Mr. Raja P M. Exactly same concept I applied. Taking Rs.80,000/- as the CP for "Goods sent on Sale or Return basis". My answer is also same as yours. But then why book's answer is coming different? What logic are they applying? Is their answer wrong?

Message likes : 1 times

RAJA P M

RAJA P M (Expert)
Follow

28 November 2017 Some time the book answers are printed wrongly... Please consider your seniors and your trainer/teacher....

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now