Undervalued closing stock means profit was understated. Adjusted 2020-21 profit = 75,000 + 10,000 = 85,000. Average Profit = (85,000 + 1,20,000 + 50,000) / 3 = 2,55,000 / 3 = 85,000.
A firm earns a profit in last three years as follows :
2020 - 21 Rs. 75,000
2019 - 20 Rs. 1,20,000
2018 - 19 Rs. 50,000
Additional Information :-
Closing stock of 2020 - 21 was undervalued by Rs. 10,000.
Calculate the Average Profit.
Held on 20 Jul 2022 · Verified 13 Jul 2026.
Rs. 55,000
Rs. 75,000
Rs. 45,000
Rs. 85,000
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