Lavender Ltd. prepared their accounts financial year ended on 31st March, 2025. Due to unavoidable circumstances actual stock has been taken on 10th…

CA Foundation · Accounting · RTP · May 2026
Lavender Ltd. prepared their accounts financial year ended on 31st March, 2025. Due to unavoidable circumstances actual stock has been taken on 10th April, 2025, when it was ascertained at 2,50,000. It has been found that; (i) Sales are entered in the Sales Book on the day of dispatch and return inwards in the Returns Inward Book on the day of the goods received back. Purchases are entered in the Purchase Book on the day the Invoices are received. (ii) Sales between1st April, 2025 to 9th April, 2025 amounting to 60,000 as per Sales Day Book. (iii) Free samples for business promotion issued during 1st April, 2025 to 9th April, 2025 amounting to 4,000 at cost. (iv) Purchases during 1st April, 2025 to 9th April, 2025 amounting to 10,000 but goods amounts to 2,000 not received till the date of stock taking. (v) Invoices for goods purchased amounting to 55,000 were entered on 28th March, 2025 but the goods were not included in stock. Rate of Gross Profit is 25% on cost. Ascertain the value of Stock as on 31st March, 2025

Suggested Answer and Working Notes:

Statement of Valuation of Physical Stock as on 31st March, 2025 Particulars ₹ Value of stock as on 10th April, 2025 2,50,000 Add: Cost of sales during the intervening period Sales made between1.4.2025 and9.4.2025 60,000 Less: Gross profit @20% on sales (12, 000) 48,000 Free sample 4,000 3,02,000 Less: Purchases actually received during the intervening period: Purchases from 1.4.2025 to 9.4.2025 10,000 Less: Goods not received upto9.4.2025 (2, 000) (8, 000) 2,94,000 Add: Purchases during March, 2025 but not recorded in stock 55,000 Value of physical stock as on 31.3.2025 3,49,000

Topics: Inventories

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