Question

From the following balances extracted from the books of M/s Ahuja and Nanda. Calculate the amount of:
(a) Cost of goods available for sale
(b) Cost of goods sold during the year
(c) Gross Profit

	₹
Opening stock	25,000
Credit purchases	7,50,000
Cash purchases	3,00,000
Credit sales	12,00,000
Cash sales	4,00,000
Wages	1,00,000
Salaries	1,40,000
Closing stock	30,000
Sales return	50,000
Purchases return	10,000

Answer 1

(a) Cost of Goods Sold Available for Sales

Or

Cost of Goods Manufactured = Opening Stock + Net Purchases + Wages

 = 25,000 + 10,40,000 + 1,00,000

 = ₹ 11,65,000

(b) Cost of Goods Sold = Opening Stock + Net Purchases + Wages – Closing Stock

 = 25,000 + 10,40,000 + 1,00,000 – 30,000

 = ₹ 11,35,000

Or

Cost of Goods Sold = Net Sales – Gross Profit

= 15,50,000 – 4,15,000

= ₹ 11,35,000

(c)

Dr.	Trading Account				Cr.
Particulars		Amount ₹	Particulars		Amount ₹
Opening Stock		25,000	Sales Credit
Purchases			Add: Sales	12,00,000
Add: Credit Purchases	7,50,000		Add: Cash Sales	4,00,000
Add: Cash Purchases	3,00,000			16,00,000
	10,50,000		Less: Sales Return	(50,000)	15,50,000
Less: Purchases Return	(10,000)	10,40,000
Wages		1,00,000	Closing Stock		30,000
Gross Profit		4,15,000
		15,80,000			15,80,000

Gross Profit ₹ 4,15,000