Question

Goods of Rs 2000 are sent to branch at 20% Profit on sales price . The amount to be credited to Branch A/c is

Answer 1

Loading on cost = 20% on cost = 1/5 of cost

This means, Loading on invoice price = 1/6 of invoice price

So, loading amount = (Rs, 2,40,000 x 1/6) = Rs. 40,000

Answer 2

The goods are sent at 2400 to the branch at 20% profit on sales price.

• Thus the amount credited to Branch Account is 2400.
• Every business form works with the Expectations of earning profit.
• Profit is said to be the blood of every business and the success of any business is dependent on the ability to continually earn profits.
• Profit helps the business to secure finance from the bank attract investors and grow its business.