Question

On the basis of the following information, calculate the amount of consumable goods to be shown in the Income and Expenditure Account for the year ended 31st December, 2017.

Stock of goods on 1-1-2017 Rs 50,000

Stock of goods on 31-12-2017 Rs 40,000

Amount paid for goods purchased Rs 2,00,000

Creditors of goods on 1-1-2017 Rs 20,000

Creditors for the goods on 31-12-2017 Rs 10,000

Answer 1

Calculation of cost of consumable goods

=Opening stock + Purchases -Closing stock

= Rs 50,000 + Rs 1,90,000*-Rs 40,000=Rs 2,00,000

*Purchases = Amount paid to creditors for goods + Closing balance of creditors of goods - Opening balance of creditors of goods

=Rs 2,00,000 +Rs 10,000 -Rs 20,000 =Rs 1,90,000