SOLUTION
Cost of Goods Sold = Net Sales – Gross Profit
= 6,00,000 – 30% of Rs. 6,00,000
= 6,00,000 – 1,80,000
= 4,20,000
Cost of Goods Sold = Opening Inventory + Purchases – Closing Inventory
4,20,000 = 50,000 + 3,90,000 – Closing Inventory
Closing Inventory = 50,000 + 3,90,000 – 4,20,000
Closing Inventory = Rs. 20,000
| Average Stock | Opening Stock + Closing Stock / 2 |
| = 50,000 + 20,000 / 2 = 35,000 |
| Stock turnover ratio | Cost of Goods sold / Average Stock |
| = 4,20,000 / 35,000 = 12 Times |