Question

According to records of a firm which not keep its accounts on double entry systems, all sales were made on credit so as to realize a profit of 33.33% on sales proceeds. The stock of unsold goods at the beginning and at the end of the trading period were valued at Rs 21,000 and 18,000 respectively. Goods worth Rs 1,39,500 were purchased for resale during the period. The proprietor withdraw goods worth Rs 1,500 during accounting period for personal use. What were the total sales during the period?

• A. Rs. 1,80,000
• B. Rs. 2,11,500
• C. Rs. 2,25,000
• D. Rs. 2,31,500

Answer 1

Answer: (B)

Rs. 2,11,500

This can be represented as :

Opening Stock Rs.21000

Add: Purchases Rs.139500

Less: Personal Use Rs. 1500

Less: Closing Stock Rs.18000

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Cost Of Good Sold Rs.141000

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Since Gross Margin are 33.33% on Sales.

Let the Sales is 100

Gross Margin is 33.33

Cost of Goods Sold is 66.67

Therefore Sales = Cost of Goods Sold/66.67*100

=Rs.211500