**SOLUTION**

**Sales = 2,00,000****Gross Profit = 25% on Sales∴ Gross Profit = 2,00,000 × 25 / 100= 50,000**

**Cost of Goods Sold = Total Sales − Gross Profit= 2,00,000 − 50,000= 1,50,000Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory5 = 1,50,000 / Average InventoryAverage Inventory = 30,000Let Opening Inventory = x**

**Closing Inventory = x + 4,000**

**Average Inventory = Opening Inventory + Closing Inventory / 2**

30,000 = (x + x + 4,000) / 2

or, 60,000 = 2x + 4,000

or, x = 28,000

30,000 = (x + x + 4,000) / 2

or, 60,000 = 2x + 4,000

or, x = 28,000

**Opening Inventory = x = Rs 28,000****Closing Inventory = x + 4,000= 28,000 + 4,000= Rs 32,000**