Question

Following information is extracted from the Trial Balance of a business:
Sales: 1,00,000; Purchase: 60,000; Wages 21,000.
Closing stock was 3,000 more than opening stock. One third of the wages was
charged to cost of goods sold in the Trading Account. What was the Gross Profit
(a) 30,000
(b) 33,000.
(c) 36,000.
(d) 40,000.​

Answer 1

Opening Stock+Purchases-closing stock=Cost of Goods sold

Putting the available information in the equation:

Rs.60000+Purchases-Rs.40000=Rs.150000

Rs.60000-Rs.40000+Purchases=Rs.150000

Rs.20000+Purchases=Rs.150000

Purchases=Rs.150000-Rs.20000

Purchases =Rs.130000.

Answer 2

The correct answer is option (c) 36,000.

Explanation:

Particulars             Rs.           Particulars          Rs.

Opening Stock       -               Sales                 1,00,000

Purchases             60,000     Closing Stock    3,000

Wages                    7,000      

(21,000 × 1/3)

Gross Profit            36,000                                                          

                              1,03,000                                1,03,000