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Question

From the following information, determine Gross Profit for the year ended 31st March, 2019:
Opening Stock (1st April, 2018)
25,000
Goods purchased during the year
1,40,000
Freight and Packing
10,000
Closing Stock (31st March, 2019)
30,000
Sales
1,90,000
Packing Expenses on Sales
6,000

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Solution

Gross Profit

=

Sales + Closing Stock – (Opening Stock + Freight and Packing + Goods Purchased)

=

1,90,000 + 30,000 – (25,000 + 10,000 + 1,40,000)

=

2,20,000 – 1,75,000 = 45,000

Alternatively,

Trading Account

for the year ended March 31, 2019

Dr.

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Opening Stock

25,000

Sales

1,90,000

Purchases

1,40,000

Closing Stock

30,000

Freight and Packing

10,000

Gross Profit (Balancing Figure)

45,000

2,20,000

2,20,000

Note: Packing Expenses (Rs 6,000) on Sales is an Indirect Expense, therefore it is not considered to compute the amount of Gross Profit.


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