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Question

From the following information, prepare Trading account for the year ended 31st March, 2018:
Adjusted Purchases ₹ 5,50,000; Sales ₹ 6,25,000; Freight and Carriage Inwards ₹ 3,000; Wages ₹ 7,000; Freight and Cartage Outwards ₹ 2,500; Closing Stock ₹ 50,000.

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Solution

Trading Account

for the year ended March 31, 2018

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Purchase (Adjusted)

5,50,000

Sales

6,25,000

Freight and Carriage Inwards

3,000

Wages

7,000

Gross Profit (Balancing Figure)

65,000

6,25,000

6,25,000

Notes:

1. Freight and Carriage Outwards are indirect expenses, therefore it is not recorded in the Trading Account.

2. Closing Stock (i.e. Rs 50,000) is not recorded in the Trading Account as it is already adjusted in the amount of Adjusted Purchases.


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