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How to calculate closing stock which is given in 6 adjustment.
Answers (7)
Abishek M
Bank overdraft is 80% of stock Therefore stock = 160000/80% Stock = 200000
But the answer is this.
Thread Starter
Saketh Reddy KotlaBut the answer is this.
After only considering 80% of they stock , the bank as security have again considered 80% only so, 80% of 80% of stock is considered to reverse this [160000/80%]/80%
Abishek M
After only considering 80% of they stock , the bank as security have again considered 80% only so, 80% of 80% of stock is considered to reverse this [160000/80%]/80%
generally, percentage means we will do multiplication but heir I can't it is division.
Multiplication/Division depends upon logic right, you can't just multiply if they've given a percentage Why are we dividing? They are telling that Bank OD = 80% of ( 80% of Stock) Let stock be the unknown value(x) 160000= 80%(80%(x)) Therefore x = 160000 divided by [ 80% x 80%]
If you have 100 of Stock, Bank will consider 80% of its value as margin or security. So the value of security that the bank is considering is 80. Loan is given at 80% of security. So 80% of 80 = 64. So amount of loan sanctioned = 100 x 80% x 80% = 64. If Loan is 64 - Inventory is 100 If Loan is 1,60,000 - Inventory is ? If Loan is 1, inventory is 100/64 So for 160000 inventory = 100/64 x 160000 = 250,000
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