CMA Intermediate · Financial Accounting · Financial Statements from Incomplete Records
A trader's opening stock was ₹80,000, purchases ₹4,20,000 and closing stock ₹1,00,000. He sells goods at a mark-up of 25% on cost. Credit sales were ₹3,40,000 as per the Total Debtors Account. What are the cash sales for the year?
Cash sales are ₹1,60,000. Cost of goods sold is ₹4,00,000, so total sales at a 25% mark-up on cost are ₹5,00,000. Deducting credit sales of ₹3,40,000 leaves cash sales as the balancing figure.
- A₹60,000
- B₹1,60,000Correct
- C₹2,85,000
- D₹3,40,000
Explanation
Cost of goods sold = 80,000 + 4,20,000 − 1,00,000 = 4,00,000. Sales = 4,00,000 × 125% = 5,00,000. Cash sales = 5,00,000 − 3,40,000 = 1,60,000. Using total sales equal to cost gives ₹60,000, and applying the mark-up to goods available gives ₹2,85,000.
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