Question

From the following balances extracted from the books of M/s Ahuja and Nanda. Calculate the amount of:

(a)	Cost of goods available for sale
(b)	Cost of goods sold during the year
(c)	Gross Profit

	Rs
Opening stock	25,000
Credit purchases	7,50,000
Cash purchases	3,00,000
Credit sales	12,00,000
Cash sales	4,00,000
Wages	1,00,000
Salaries	1,40,000
Closing stock	30,000
Sales return	50,000
Purchases return	10,000

Answer 1

(a) Cost of Goods Sold Available for Sales

Or

Cost of Goods Manufactured = Opening Stock + Net Purchases + Wages

= 25,000 + 10,40,000 + 1,00,000

= Rs 11,65,000

(b) Cost of Goods Sold = Opening Stock + Net Purchases + Wages – Closing Stock

= 25,000 + 10,40,000 + 1,00,000 – 30,000

= Rs 11,35,000

Or

Cost of Goods Sold = Net Sales – Gross Profit

= 15,50,000 – 4,15,000

= Rs 11,35,000

(c)

Trading Account
Dr.				Cr.
Particulars			Amount Rs	Particulars			Amount Rs
Opening Stock			25,000	Sales
Purchases					Add: Credit Sales	12,00,000
	Add: Credit Purchases	7,50,000			Add: Cash Sales	4,00,000
	Add: Cash Purchases	3,00,000				16,00,000
		10,50,000			Less: Sales Return	(50,000)	15,50,000
	Less: Purchases Return	(10,000)	10,40,000
Wages			1,00,000		Closing Stock		30,000
Gross Profit			4,15,000
			15,80,000				15,80,000

Gross Profit Rs 4,15,000