Page 136 - debkxi

Financial Statements of Sole Proprietorship ... 18.3

Solved Questions

1. Opening Stock ` 20,000, Purchases ` 18,200, Expenses on Purchases ` 2,000,
Sales ` 35,000, Expenses on Sales ` 1,000, Closing Stock ` 22,200. Calculate Cost
of Goods Sold and Gross Profit.
Solution:
Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses
(Expenses on Purchases) – Closing Stock
= ` 20,000 + ` 18,200 + ` 2,000 – ` 22,200 = ` 18,000.
Gross Profit = Net Sales – Cost of Goods Sold
= ` 35,000 – ` 18,000 = ` 17,000.

2. Opening Stock ` 5,000, Sales ` 18,000, Carriage Inwards ` 1,000, Sales Returns
` 3,000, Gross Profit ` 6,000, Purchases ` 10,000, Purchases Return ` 900. Calculate
the Closing Stock and the Cost of Goods Sold.

Solution:
Net Sales = Sales – Sales Returns
= ` 18,000 – ` 3,000 = ` 15,000.
Cost of Goods Sold = Net Sales – Gross Profit
= ` 15,000 – ` 6,000 = ` 9,000.
Cost of Goods Sold = Opening Stock + Purchases – Purchases Returns
+ Carriage Inwards – Closing Stock
` 9,000 = ` 5,000 + ` 10,000 – ` 900 + ` 1,000 – Closing Stock.
Closing Stock = ` 15,100 – ` 9,000 = ` 6,100.

3. Cash Sales ` 39,000, Credit Sales ` 41,000, Cost of Goods Sold ` 72,000, Expenses
on Purchases ` 3,000, Expenses on Sales ` 6,700. Find out Gross Profit and Net
Profit.
Solution:
Gross Profit = Net Sales – Cost of Goods Sold
= (` 39,000 + ` 41,000) – ` 72,000 = ` 8,000.
Net Profit = Gross Profit – Indirect Expenses
= ` 8,000 – ` 6,700 = ` 1,300.

4. Opening Capital ` 70,000, Drawings ` 5,000, Capital added during the year
` 10,000, Closing Capital ` 1,00,000. Calculate Profit or Loss.

Solution:
Profit = Closing Capital + Drawings – Additional Capital
– Opening Capital
= ` 1,00,000 + ` 5,000 – ` 10,000 – ` 70,000 = ` 25,000.
5. Drawings ` 15,000, Profit for the year ` 25,000, Closing Capital ` 70,000. Calculate
the Opening Capital.