Question

From the following details, you are required to prepare trading and profit and loss a/c:
Cost of goods sold = Rs. 16,00,000
Gross profit ratio = 20%
Administrative expenses ratio
= 7%
Selling and distribution expenses ratio = 5%
Non operating income to sales 8%
Financial expenses are equal to selling and distribution expenses.​

Answer 1

Answer:

Case 1

Credit Sales = 3,00,000

Cash sales = 25% of Credit Sales

Total Sales = Cash Sales + Credit Sales

= 3,00,000 + 75,000 = 3,75,000

Gross Profit = 20% on Sales

Cost of Goods Sold = Total Sales − Gross Profit

= 3,75,000 − 75,000 = 3,00,000

Case 2

Let Total Sales = x

Total Sales = Cash Sales + Credit Sales

Gross Profit = Sales − Cost of Goods Sold