Question

From the following balances taken from the books of Simmi and Vimmi Ltd. for the year ending March 31, 2011, calculate the gross profit.

$(Rs.)$
$\text{Closing stock}2,50,000$
$\text{Net sales during the year}40,00,000$
$\text{Net purchase during the year}15,00,000$
$\text{Opening stock}15,00,000$
$\text{Direct expenses}80,000$

Answer 1

For computing the gross profit from the above information, it would be appropriate to prepare the trading account as all the above information are related with trading account only.

$\text{Trading Account}$
$\text{as on 31st March, 2011}$

$\begin{array}{cccc}\text{Particulars}& \text{Amt. (Rs.)}& \text{Particulars}& \text{Amt. (Rs.)}\\ \text{Opening Stock}& 15,00,000& \text{Net Sales}& 40,00,000\\ \text{Net Purchases}& 15,00,000& \text{Closing Stock}& 2,50,000\\ \text{Direct Expenses}& 80,000& & \\ \text{Gross Profit b/d}& 11,70,000& & \\ & \underset{–}{\overline{42,50,000}}& & \underset{–}{\overline{42,50,000}}\end{array}$