Question

29. From the following balances extracted from the books of M/s Ahuja
and Nanda. Calculate the amount of
(a) Cost of goods available for sale (b) Gross Profit
Opening stock 25,000. Credit purchases 7.50.000. Cash purchases
3,00,000, Credit sales 12,00.000, Cash sales 4,00,000. Wages
1.00,000, Salaries 1,40,000. Closing stock 30,000, Sales
return 50,000, Purchases retum 10.000.

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Answer 1

Answer

Solution

(a) Cost of goods available for sales which mean total goods produced during the year.

Cost of Production

= (Opening Stock + Purchase + Wages - Purchase Return)

= Rs. 25,000 + (Rs. 7,50,000 + Rs. 3,00,000) + Rs. 1,00,000 - Rs. 10,000

= Rs. 11,65,000

(b) Cost of Goods sold = Cost of Production - closing Stock

                                        = Rs. 11,65,000 - Rs. 30,000

                                        =  Rs. 11,35,000

(c) Gross Profit: For computing gross profit, preparation of Trading account would be appropriate.

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