Question

Calculate the amount which will be posted to income and expenditure account for the year ending 31st March, 2012.

$\begin{array}{cc}& \text{(Rs)}\\ \text{Opening stock of medicines on 1.4.2011}& 62,000\\ \text{Opening creditors of medicines on 1.4.2011}& 25,000\\ \text{Amount of advance payment for medicines on 1.4.2011}& 11,500\\ \text{Cash purchase of medicines during the year}& 3,70,000\\ \text{Closing stock of medicines on 31.3.2012}& 54,000\\ \text{Closing creditors of medicines on 31.3.2012}& 17,000\\ \text{Amount of advance payment for medicines on 31.3.2012}& 18,200\end{array}$

Answer 1

Statement showing Medicine expenses

$\begin{array}{ccc}\text{Particulars}& \text{Amount (Rs)}& \text{Amount (Rs)}\\ \text{Cash purchases of medicines during 2011-12}& & 3,70,000\\ \text{Add: Opening Stock of medicine}& \underset{–}{62,000}& \underset{–}{62,000}\\ & & 4,32,000\\ \text{Less: Closing Stock of medicine}& 54,000& 54,000\\ \text{Medicine consumed to be shown as expenditure}& & 3,78,000\end{array}$

As we are given Cash purchases in the question, we should consider only opening & closing stock.