From the following information, calculate the historical cost of closing inventories using adjusted selling price method: Purchase during the year…

Sales - 15,00,000 Add: Closing inventory (at selling price)₹ 2,00,000 Selling price of goods available for sale:17,00,000 Less: Cost of goods available for sale - 10,00,000 Gross margin - 7,00,000 Rate of gross margin = (₹ 7,00,000 /17,00,000) ×₹ 100 = 41.18% Cost of closing inventory = 2,00,000 less41.18% of 2,00,000 = 1,17,640 *This rate may also be considered as 41.176% in that case, the closing inventory will be valued at 1,17,640 OR as 41.17% in that case, the closing inventory will be valued at 1,17,640