Using the data provided, calculate the value of the opening stock. Purchases amount to 150,000, closing stock is 30,000, sales total 220,000, and the gross profit is 40,000.

Explanation

To find the opening stock, use the formula: Gross Profit = Sales - Cost of Goods Sold (COGS). COGS = Opening Stock + Purchases - Closing Stock. Given Gross Profit = 40,000 and Sales = 220,000, COGS = 220,000 - 40,000 = 180,000. Substituting: 180,000 = Opening Stock + 150,000 - 30,000. Therefore, Opening Stock = 180,000 - 150,000 + 30,000 = 60,000.