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.
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Solution
Gross Profit = Net Sales – Cost of Goods Sold
1,29,000 = Net Sales – 97,000
Net Sales = ₹ 2,26,000
Credit Sales = Total Net Sales – Cash Sales
Credit Sales = 2,26,000 – 85,000 = ₹ 1,41,000