How To Calculate Cost of Goods Sold With And Without Beginning Or Ending Inventory

How To Find Cost of Sales With Beginning And Ending Inventory | How To Compute Cost of Sales Without Beginning Or Ending Inventory

Here, Firstly, we calculate Cost of Goods Sold (Cost of Sales) by giving the value of opening inventory and closing inventory and then without the beginning inventory and ending inventory with other given information.

1. Calculation of Cost of Goods Sold With Beginning Or Ending Inventory

Calculate Cost of Goods Sold / Cost of Sales, If following are given:

Sales = Rs. 108000, Opening Inventory or Stock = 50000, Purchases = Rs. 70000 and Ending Inventory or Stock = Rs. 70000

                                                                  Rs.

Sales                                                      108000

- Cost of Sales

Opening Inventory        50000

+ Purchases                 70000

- Closing Inventory       30000

                                   ________          (90000)

                                                            ________

Gross Income / Gross Profit                 18000

                                                           ________

                                                           ________

If the company’s owners just started the business, then there is no opening inventory as it is the first accounting period of the business.

2. Calculation of Cost of Goods Sold Without Beginning And Ending Inventory

Given:-

Sales = Rs. 1200000, Rate of Gross Profit On Cost = 20%

Required: Cost of Goods Sold

We know that:

                                              Sales = Cost of Sales + Gross Profit

                                             Cost of Sales = Sales - Gross Profit

                                             Cost of Sales = 120000 - 20000 = Rs. 100000

Here Gross Profit Rate = 20%, Cost of Sales Rate = 100 And Sales Rate = 120

                                  Gross Profit = 20/120 X 1200000 = Rs. 20000