Question

From the following information ascertain the opening balance of sundry debtors and closing balance of sundry creditors

	Rs
Opening stock	30,000
Closing stock	25,000
Opening creditors	50,000
Closing debtors	75,000
Discount allowed by creditors	1,500
Discount allowed to customers	2,500
Cash paid to creditors	1,35,000
Bills payable accepted during the period	30,000
Bills receivable received during the period	75,000
Cash received from customers	2,20,000
Bills receivable dishonoured	3,500
Purchases	2,95,000

The rate of gross profit is 25% on selling price and out of the total sales Rs 85,000 was for cash sales.

(Hint: Total sales = 4,00,000 = 3,00,000 × 100 × `100/75`)

Answer 1

Sundry Debtors Account
Dr.				Cr.
Particulars	Amount Rs		Particulars	Amount Rs
Balance b/d	54,000		Discount Allowed	2,500
(Balancing figure)			B/R (received)	75,000
B/R (dishonoured)	3,500		Cash	2,20,000
Sales—Credit	3,15,000
			Balance c/d	75,000
	3,72,500			3,72,500

 

Sundry Creditors Account
Dr.				Cr.
Particulars	Amount Rs		Particulars	Amount Rs
Discount Received	1,500		Balance b/d	50,000
Cash	1,35,000		Purchases – credit	2,95,000
B/P (accepted)	30,000
Balance c/d	1,78,500
(Balancing figure)
	3,45,000			3,45,000

Opening balance of debtors is Rs 54,000 and the closing balance of creditors is Rs 1,78,500.

Working Notes:

Total Sales = Cash Sales + Credit Sales

Total Sales = Cost of Goods Sold + Gross Profit

Cost of Goods Sold = Opening Stock + Purchases – Closing Stock

= 30,000 + 2,95,000 – 25,000

= Rs 3,00,000

Let sales be 100%

Sales = Cost of Goods sold + Gross Profit

Or

100 = Cost of Goods sold + 25%

Cost of Goods Sold = 100% - 25% = 75%

Gross Profit = `"Cost of Good Sold"/"% of Cost of Goods" xx %  "of Gross Profit"`

= `(3,00,000)/75 xx 25`

= 1,00,000

Sale = Cost of Goods Sold + Gross Profit

= 3,00,000 + 1,00,000

= 1,00,000

Total Sales = Cash Sales + Credit Sales

Or = 85,000 + Credit Sales

Or, Credit = 4,00,000 – 85,000

Sales = Rs 3,15,000

Note:

Here, it has been assumed that all purchases were made on credit.