Question 20.
A firm sells goods at a Gross profit of 25% of sales. On 1st April, 2017 the Stock was ₹ 40,000; Purchases were ₹ 1,10,000 and the Stock on 31st March, 2018 was ₹ 30,000. What was the value of Sales?
Answers
The value of sales amounts to Rs 160,000
Explanation:
The value of sales is computed by the trading account, which is as:
Trading Account
Dr Side
Opening Stock A/c Rs 40,000
Purchases Rs 110,000
Gross Profit c/d Rs 40,000
Total Rs 190,000
Cr Side
Sales A/c Rs 160,000
Closing Stock Rs 30,000
Total Rs 190,000
Working Note:
Gross Profit = Rs 120,000 × 25 / 75
= Rs 40,000
Sales = Total - Closing stock
= Rs 190,000 - Rs 30,000
= Rs 160,000