Question

Journal entry for Goods costing Rs 40,000 sold at profit of 20% for cash. you show the profit seperately?

Answer 1

Cash A/C    Dr   Rs. 48,000

   To Sales A/C    Rs.48,000

(Being goods sold for cash)

Selling price = Cost of goods + Profit

                   = Rs.40,000 + 20%(40,000)

                  = Rs.40,000 + 8000 = Rs.48,000

Answer 2

Goods Costing = 40000

Sold at a profit of 20%.

Profit = 40000 * 20/100

         = 40000/5

         = Rs. 8000