Question

From the following information ascertain the opening balance of sundry debtors and closing balance of sundry creditors:

$\begin{array}{cc}& \text{Rs.}\\ \text{Opening stock}& 30,000\\ \text{Closing stock}& 25,000\\ \text{Opening creditors}& 50,000\\ \text{Closing debtors}& 75,000\\ \text{Discount allowed by creditors}& 1,500\\ \text{Discount allowed by customers}& 2,500\\ \text{Cash paid to creditors}& 1,35,000\\ \text{Bills payable accepted during the period}& 30,000\\ \text{Bills receivable received during the period}& 75,000\\ \text{Cash received from customers}& 2,20,000\\ \text{Bills receivable dishonoured}& 3,500\\ \text{Purchases}& 2,95,000\end{array}$

The rate of gross profit is 25% on selling price and out of the total sales Rs.85,000 was for cash sales.

Answer 1

$\text{Dr.}\text{Debtor's Account}Cr.$

$\begin{array}{cccccccc}\text{Date}& \text{Particulars}& \text{J.F.}& \text{Amt. (Rs.)}& \text{Date}& \text{Particulars}& \text{J.F.}& \text{Amt. (Rs.)}\\ & \text{Balance b/d}& & & & \text{Discount}& & \\ & \text{(Balancing figure)}& & 54,000& & \text{Allowed A/c}& & 2,500\\ & & & & & \text{Bills}& & \\ & \text{Bills}& & & & \text{Receivable A/c}& & \\ & \text{Receivable A/c}& & & & \text{(Received)}& & 75,000\\ & \text{(Dishonoured)}& & 3,500& & \text{Cash A/c}& & 2,20,000\\ & \text{Sales A/c (credit)}& & 3,15,000& & \text{Balance c/d}& & 75,000\\ & & & \underset{–}{\underset{–}{\overline{3,72,500}}}& & & & \underset{–}{\underset{–}{\overline{3,72,500}}}\end{array}$

$\text{Dr.}\text{Creditor's Account}Cr.$

$\begin{array}{cccccccc}\text{Date}& \text{Particulars}& \text{J.F.}& \text{Amt. (Rs.)}& \text{Date}& \text{Particulars}& \text{J.F.}& \text{Amt. (Rs.)}\\ & \text{Discount}& & & & \text{Balance b/d}& & 50,000\\ & \text{Received}& & 1,500& & \text{Purchases}& & \\ & \text{Cash A/c)}& & 1,35,000& & \text{(credit)}& & 2,95,000\\ & \text{Bills}& & & & & & \\ & \text{Receivable}& & & & & & \\ & \text{(Acceptance)}& & 30,000& & & & \\ & \text{Balance c/d}& & 1,78,500& & & & \\ & \text{(Balancing figure)}& & & & & & \\ & & & \underset{–}{\underset{–}{\overline{3,45,000}}}& & & & \underset{–}{\underset{–}{\overline{3,45,000}}}\end{array}$

Note: It is assumed that all purchase is credit purchase.

Working Note

Computation of Credit Sales

Sales
= Cost of goods sold + Gross profit

Cost of goods sold
= Opening stock + Purchases - Closing Stock

= Rs. 30,000 + Rs. 2,95,000 - Rs. 25,000
= Rs. 3,00,000

When the cost of goods sold is Rs. 3,00,000.

Sales will be (Total)
= 3,00,000 + 25% Gross Profit

Gross profit is calculated on sales hence if calculatedon cost of goods sold. The formula will be

=$[\text{Cost of goods sold}\times \frac{25}{100-25}]$

=$[3,00,000\times \frac{25}{75}]$
= Rs. 1,00,000

Total Sales
= Rs. 3,00,000 + Rs. 1,00,000
= Rs. 4,00,000

As we know that cash sales is Rs. 85,000.

So credit sales will be
= Rs. 4,00,000 - Rs. 85,000
= Rs. 3,15,000.