Question

Question 31.
Cash sales of a business in a year were ​₹ 85,000, the Cost of Goods Sold (including direct expenses) was ₹ 97,000 and Gross Profit as shown by the Trading Account for the year was ₹ 1,29,000. Calculate Credit Sales during the year.

Answer 1

The Credit Sales during the year is ₹ 1,41,000.

Explanation:

Given:

Cash sales of a business in a year were ​₹ 85,000, the Cost of Goods Sold (including direct expenses) was ₹ 97,000 and Gross Profit as shown by the Trading Account for the year was ₹ 1,29,000.

Now, to find the Credit Sales during the year.

Gross Profit = ₹ 1,29,000.

Cost of Goods Sold = ₹ 97,000.

Cash Sales = ​₹ 85,000.

So, we need to get the Net sales by putting formula:

Net Sales = Gross Profit + Cost of Goods Sold

$Net\ Sales=129000+97000\\\\Net\ Sales=226000.$

Thus, Net Sales = ₹ 2,26,000.

Now, to get the Credit Sales we put formula:

Credit Sales = Net Sales - Cash Sales

$Credit\ Sales=226000-85000\\\\Credit\ Sales=141000.$

Therefore, the Credit Sales during the year is ₹ 1,41,000.