The amount of closing stock would be, when

Sales - Rs. 6,00,000

Opening Stock - Rs. 50,000

Purchases - Rs. 5,00,000

Productive Wages - Rs. 10,000

Carriage Inwards - Rs. 7,000

Rate of Gross Profit on cost - 20%

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  1. Rs. 55,000 
  2. Rs. 67,000
  3. Rs. 50,000
  4. More than one of the above 
  5. None of the above

Answer (Detailed Solution Below)

Option 2 : Rs. 67,000
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Detailed Solution

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The correct answer is Rs. 67000.

Key Points

Cost of Sales = Sales - Gross Profit

Since the Rate of Gross Profit on cost is 20%, the Sales are 120% of the Cost of Sales.

Therefore, Cost of Sales = Sales / 120% = Rs. 6,00,000 / 1.2 = Rs. 5,00,000.

Then, we calculate the amount of closing stock:

Cost of Goods Sold (COGS) = Opening Stock + Purchases + Productive Wages + Carriage Inwards - Closing Stock

Solving for Closing Stock, we have:

Closing Stock = Opening Stock + Purchases + Productive Wages + Carriage Inwards - COGS

Substituting the known values, we get:

Closing Stock = Rs. 50,000 (Opening Stock) + Rs. 5,00,000 (Purchases) + Rs. 10,000 (Productive Wages) + Rs. 7,000 (Carriage Inwards) - Rs. 5,00,000 (COGS)

Closing Stock = Rs. 67,000.

So, the correct answer is: 2) Rs. 67,000

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