From the following information, calculate opening inventory.

Revenue from Operations = 4,00,000
Gross Profit Ratio = 10%
Carriage outwards = 2,000
Closing Inventory = 75,000
Purchases of stock in trade = 3,50,000

₹85,000

The correct answer is Option (1) → 85,000

Gross Profit Ratio = Gross Profit/Net Revenue from Operations ×100
10 = Gross profit/400000 x 100
Gross profit = 10 x 400000/100
                 = 40000

Cost of goods sold = Revenue from operations - gross profit
                           = 400000 - 40000
                           = 360000

Cost of goods sold = Opening inventory + purchases - closing inventory
               360000  = Opening inventory + 350000 - 75000
Opening inventory = 360000 -350000 +75000
                           = 85000

CARRIAGE OUTWARDS ARE INDIRECT EXPENSE SO NOT DEDUCTED WHILE CALCULATING COST OF GOODS SOLD.