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Gold cost of sales

shakeel (GFM) (38 Points)

12 January 2021

How cost of sales is calculated in gold jewellery business?

Sales		570,873
COGS:
Opening	289,800
Purchases	446,832
closing	788,500
		(51,869)

GP		622,741

????

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7 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 12 January 2021

Opening stock+Purchase-Closing stock = Cost of sales

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 13 January 2021

Yes, the above formula is correct, include depreciation, and amortisation as well

ANAND (ARTICLE TRAINEE) (29 Points)
Replied 13 January 2021

This can't be right. though formula is correct. why closing stock is more than purchase and opening? how closing stock is valued

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shakeel (GFM) (38 Points)
Replied 13 January 2021

Sales		570,873
COGS:
Opening	289,800
Purchases	446,832
closing	403,726
		332,906

GP		237,967

Yes, there was error. But I still feel it higher. The closing stock is inventory available at the year end valued at the rate as on that date.

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 13 January 2021

It doesn’t matter! As far as cos is concerned= opening inventory+purchases - return+ amortisation/ depreciation & nrv of damaged goods and a lot more than I know. So what is your problem now, if you need a formula, I have every formula from online you know.

shakeel (GFM) (38 Points)
Replied 13 January 2021

@ yasaswi gomes: Why are you wasting your time? I did not ask you. In fact you could not identify error which Anand did. Do not respond to my query please.