Question

1 Ascertain the Gross profit from the following figures.
Opening stock of Goods 20,000
Closing stock of Goods 30,000
Purchases. 80,000
Purchases Returns. 2,000
Sales 1,60,000
Sales Returns. 3,000
Carriage Inwards 2,000
Carriage Outwards 4,000
Freight, duty and clearing charges
50,000
Rent and taxes 3,500​

Answer 1

Solution!!

Cost of goods sold (COGS) = Opening Stock + Net Purchases + Direct Expenses - Closing Stock

→ Opening Stock = Rs 20,000

Net Purchases = Purchases - Purchases Return

Net Purchases = Rs 80,000 - Rs 2,000

→ Net Purchases = Rs 78,000

Direct Expenses = Carriage Inwards + Freight, Duty and Clearing charges

Direct Expenses = Rs 2,000 + Rs 50,000

→ Direct Expenses = Rs 52,000

→ Closing Stock = Rs 30,000

COGS = Rs 20,000 + Rs 78,000 + Rs 52,000 - Rs 30,000

COGS = Rs 1,20,000

Gross Profit = Net Sales - COGS

Net sales = Sales - Sales Return

Net sales = Rs 1,60,000 - Rs 3,000

→ Net Sales = 1,57,000

Gross Profit = Rs 1,57,000 - Rs 1,20,000

Gross Profit = Rs 37,000

(Note:- Carriage Outwards and Rent and taxes are indirect expenses. Hence, they will not be used in calculating gross profit.)