Question

1. Calculate the amount of gross profit and operating profit on the basis of the following balances extracted from the books of M/s Rajiv & Sons for the year ended March 31, 2014.

Opening Stock
50,000
Net sales
11,00,000
Net purchases
6,00,000
Direct expenses
60,000
Administration expenses
45,000
Selling and distribution expenses
65,000
Loss due to fire
20,000
Closing stock

Answer 1

(Q.1) Calculate the amount of gross profit and operating profit on the basis of the following balances extracted from the books of M/s Rajiv & Sons for the year ended March 31, 2005.  Particulars Rs. Opening stock 50,000 Net sales 11,00,000 Net purchases 6,00,000 Direct expenses 60,000 Administration expense 45,000 Selling and distribution expenses 65,000 Loss due to fire 20,000 Closing stock 70,000.

Solution :- Operating Profit = Net profit + Non operating expenses – Non operating incomes. Operating profit = Sales – (opening stock + Net purchases + D.E + Indirect expenses) + closing stock. = 11,00,000 – (50,000+6,00,000+60,000+45,000+65,000)4-70,000  = 11,00,000-8,20,000+70,000  = 3,50,000.

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