calculate the closing Stock on 31.03.2011
Particulars 31.03.2010 31.03.2011
Opening Stock 30,000 35,000
Purchases 3,25,000 4,20,000
Sales 4,00,000 5,00,000
The profit margin remains unchanged a) Rs. 35,000 b) Rs. 50,000 c) Rs. 55,000 d) Rs. 60,000
answer is (c)Rs. 55,000
Please explain ....how is it....??
| Originally posted by : vijay bhasker kondapally | ||
 |
to answer this question we need either profit or closing stock of year 2010. otherwise it is impossible to solve it. i think u forgot to give that info. |
 |
i didn't forget anything........it is complete question........ asked in July 2012 CPT exam...
| Originally posted by : Devesh | ||
|
|
Yes.. Its 55000.. Coz profit for 2011 will be 100000 according to unchanged profit margin.. in 2010 opening stock + purchase= 30000+325000=355000 and sales + closing stock= 400000+35000=435000, profit = 435000-355000=80000. Profit margin on sale is 80000/400000*100=20% as given in problem, profit ratio remains same.. In 2011 profit will be 100000 ie 20% of sale.. closing stock+sale=(O.stock + purchase + profit) closing stock=35000+420000+100000-500000=55000.. Hope i m right.. |
|
it all are going over my head......i didn't understand it......how u calculate.....??
closing stock 35,000 kahan se aaya....??
aur ye unchanged profit margin kya hota hain.....
pls.....explain in detail.....bro step to step.......!!
| Originally posted by : vijay bhasker kondapally | ||
|
|
to answer this question we need either profit or closing stock of year 2010. otherwise it is impossible to solve it. i think u forgot to give that info. |
|
Mr. Vijay, Look at the question carefully, one of the data is given that you want. Closing stock of the year 2010 is given. It will be the same as opening Stock of year 2011 i.e. Rs. 35000.
Step by step Solution:
Profit for the year 2010 = Cl Stock + Sales - Op Stock - Purchases
= 35000+400000-30000-325000
= Rs. 80000.
Profit Margin on Sales = Profit / Sales*100%
= 80000/400000*100%
= 20%
Since, profit Margin for the both year is same, Profit margin for the year 2011 ia also 20%.
So, Profit for the year 2011 = Sale * Profit Margin
= 500000*20%
= Rs. 100000
So, Closing Stock for the year 2011 = Purchase + Op Stock + Profit - Sales
= 420000+35000+100000-500000
= Rs. 55000
Hence, Closing Stock for the year 2011 is Rs. 55000.
@ Harish Kumar: Hope you got what you want.
| Originally posted by : Isham Mahajan | ||
|
|
2010's closing stock is 2011's opening stock... |
|
thanxx
| Originally posted by : Yajendra Adhikari | ||
|
|
Originally posted by : vijay bhasker kondapally to answer this question we need either profit or closing stock of year 2010. otherwise it is impossible to solve it. i think u forgot to give that info. Mr. Vijay, Look at the question carefully, one of the data is given that you want. Closing stock of the year 2010 is given. It will be the same as opening Stock of year 2011 i.e. Rs. 35000. Step by step Solution: Profit for the year 2010 = Cl Stock + Sales - Op Stock - Purchases = 35000+400000-30000-325000 = Rs. 80000. Profit Margin on Sales = Profit / Sales*100% = 80000/400000*100% = 20% Since, profit Margin for the both year is same, Profit margin for the year 2011 ia also 20%. So, Profit for the year 2011 = Sale * Profit Margin = 500000*20% = Rs. 100000 So, Closing Stock for the year 2011 = Purchase + Op Stock + Profit - Sales = 420000+35000+100000-500000 = Rs. 55000 Hence, Closing Stock for the year 2011 is Rs. 55000. @ Harish Kumar: Hope you got what you want. |
|
All clear but confusion in 20%.....
how we know that we use this formula
Profit Margin on Sales = Profit / Sales*100%
please clear my doubts...........
According to Yajendra Adhikari Sir,
It is simple calculation and formula si GP Ratio = Grossprofit /Sales *100
| Originally posted by : Harish Kumar | ||
|
|
All clear but confusion in 20%..... how we know that we use this formula Profit Margin on Sales = Profit / Sales*100% please clear my doubts........... |
I
|
I year - (Closing Stock + Sales) - (Opening Stock + Purchase) = GP which is always a % on Sales ( here remained unchanged)
II year - Sales - (Opening Stock + Purchase + Sales *GP% for GP) = Closing Stock
The closing stock is Rs 55000 and the above method is right
In Question it is clearly written "Profit Margin will remain unchanged. Profit margin is GP/ Sales and thus we came to know that we have to calculate 20% of Sales as G.P.
CAclubindia
