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CA Foundation · Accounting · Final Accounts of Sole Proprietors

Gross profit of Nandini Stores for the year is Rs 3,20,000. Expenses: salaries Rs 90,000, rent Rs 40,000, carriage outwards Rs 15,000, and discount allowed Rs 5,000. Interest on bank deposit received is Rs 12,000. What is the net profit?

Net profit is Rs 1,82,000. Add interest income of Rs 12,000 to gross profit of Rs 3,20,000, giving Rs 3,32,000, then deduct total expenses of Rs 1,50,000 (salaries, rent, carriage outwards and discount allowed).

  1. ARs 1,82,000Correct
  2. BRs 1,70,000
  3. CRs 1,77,000
  4. DRs 2,02,000

Explanation

Total expenses = 90,000 + 40,000 + 15,000 + 5,000 = 1,50,000. Net profit = 3,20,000 + 12,000 - 1,50,000 = 1,82,000. Rs 1,70,000 results from ignoring the interest income.

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