Page 168 - DMGT104_FINANCIAL_ACCOUNTING

Financial Accounting

Notes Solution:
Trading account for the year ended 31st March 2011
Dr Cr
( ) ( )
To Opening Stock 50,000 By Cash Sales 40,000
To Cash Purchase 1,20,000 Add: Credit Sales 1,00,000
Add: Credit Purchase 1,00,000 By Total Sales 1,40,000
To Total Purchase 2,20,000 Less: Sales Return 30,000
Less: Purchase Return 20,000 By Net Sales 1,10,000
To Net Purchase 2,00,000 By Closing Stock 10,000
To Carriage Inwards 10,000 By Gross Loss c/d 1,50,000
To Marine Insurance 6,000
To Other Direct Expenses 4,000
2,70,000 2,70,000
To Gross Loss B/d 1,50,000 1,50,000

Gross Loss is due to an excess of the debit side total over the credit side total.
Illustration 3: From the following information, calculate the stock at the end:
( )

Opening stock 62,000
Purchases 4, 20,000
Sales 6,00,000
1
Rate of Gross Profit on Cost = 33
3
Solution:
1
Gross profit on cost = 33
3
1
33 1
Hence Gross profit on Sales = 3 = or 25%
1 4
133
3
Trading Account
(for the year ended………)
Particulars ( ) Particulars ( )
To opening stock 62,000 By sales (given) 6,00,000
To purchases 4,20,000 By closing stock
To gross profit (Balancing figure) 32,000
1
On cost 33 % or
3 1,50,000
25% on sales which is 6,00,000

6,32,000 6,32,000

Thus, we can say that the value of stock at the end was 32,000.

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