Question

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, 2017.
[tex]
\begin{tabular}{c c}\\
\begin{center}\\
& Rs. \\
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 & 70,000
\end{center}
\end{tabular}
[/tex]

Answer 1

Answer:

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Answer 2

The amount of gross profit and operating profit is Rs 3,50,000.

Explanation:

Given:

Opening stock - Rs 50,000.

Net Sales          - Rs 11,00,000.

Net purchases -  Rs 6,00,000.

Direct expenses - Rs 60,000.

Administration expenses - Rs 45,000.

Selling and distribution expenses - Rs 65,000.

Loss due to fire - Rs 20,000.

Closing stock - Rs 70,000.

Now, to find the amount of gross profit and operating profit.

Now, to get the amount of gross profit and operating profit we put formula:

Gross profit and operating profit = (Net Sales + Closing stock) - (Opening stock + Net purchases + Direct expenses + Administration expenses + Selling and distribution expenses)

Gross profit and operating profit = $(11,00,000+70,000)-(50,000+6,00,000+60,000+45,000+65,000)$

Gross profit and operating profit $=11,70,000-8,20,000$

Gross profit and operating profit = $3,50,000.$

Therefore, the amount of gross profit and operating profit is Rs 3,50,000.