Question

2. From the following information find cost of goods sold and
Gross profit
Opening stock
45000
Purchases
160000
Direct expenses
5000
Sales
18000
Closing stock
9000​

Answer 1

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Answer 2

CORRECT QUESTION :

• From the following information, find Cost of goods sold and Gross profit/Gross Loss :-

• Opening stock Rs. 45000
• Purchases Rs. 160000
• Direct expenses Rs. 5000
• Sales Rs. 18000
• Closing stock Rs. 9000

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SOLUTION :

❒ Given :-

• Opening stock Rs. 45000

• Purchases Rs. 160000

• Direct expenses Rs. 5000

• Sales Rs. 18000

• Closing stock Rs. 9000

❒ To Find :-

• Cost of Goods sold = ?

• Gross Profit/Gross Loss = ?

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❒ Required Formulas :-

• ★ Cost of Goods Sold = Opening Stock + Net Purchase + Direct Expenses - Closing Stock

• ★ Gross Profit = Net Sales - Cost of Goods Sold

• ★ Gross Loss = Cost of Goods Sold - Net Sales

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❒ Note :-

• Net purchases is calculated by deducting purchases return from the total purchase. Similarly, net sales is calculated by deducting sales return from the total sales.

• In the given question, purchases return and sales return is not given. Hence, the amount of purchases and sales will be considered as Net purchase and Net sales respectively.

• When the cost of goods sold is less than the net sales, there is a Profit. On the other hand, the cost of goods sold is greater than the net sales, there is a loss.

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❒ Calculation of Cost of Goods Sold :-

Using the formula,

• ★ Cost of Goods Sold = Opening Stock + Net Purchase + Direct Expenses - Closing Stock

➨ Cost of Goods Sold = Rs. 45000 + Rs. 160000 + Rs. 5000 - Rs. 9000

➨ Cost of Goods Sold = Rs. 210000 - Rs. 9000

∴ Cost of Goods Sold = Rs. 201000 ✪

• Hence, the Cost of Goods Sold is Rs. 201000.

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[ Here, the amount of Cost of Goods Sold is greater than the amount of Sales. Hence, there is a loss. ]

❒ Calculation of Gross Loss:-

Using the formula,

• ★ Gross Loss = Cost of Goods Sold - Net Sales

➨ Gross Loss = Rs. 201000 - Rs. 18000

∴ Gross Loss = Rs. 183000 ✪

• Hence, the Gross Loss is Rs. 183000.