Question

From the following information, prepare Trading Account for the year ended 31st March, 2019:
Adjusted Purchases ₹ 6,60,000; Sales ₹ 7,44,000; Closing Stock ₹ 50,400; Freight and Carriage Inwards ₹ 3,600; Wages ₹ 6,000; Freight and Cartage Outwards ₹ 2,000.

Answer 1

Trading Account for the year ended March 31, 2019
Dr.					Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Purchase (Adjusted)		6,60,000	Sales	7,44,000
Freight and Carriage Inwards		3,600
Wages		6,000
Gross Profit (Balancing Figure)		74,400
		7,44,000		7,44,000

Notes:

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

2. Closing Stock (i.e. Rs 50,400) is not recorded in the Trading Account as it is already adjusted in the amount of Adjusted Purchases.