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CMA Foundation · Fundamentals of Financial and Cost Accounting · Financial Statements of Sole Proprietorship

Opening stock of Rs 40,000; purchases Rs 3,20,000; purchase returns Rs 20,000; carriage inwards Rs 10,000; wages Rs 30,000; closing stock Rs 60,000. Sales are Rs 4,10,000 and sales returns Rs 10,000. Gross profit is:

Net sales are Rs 4,00,000. Cost of goods sold is opening stock plus net purchases, carriage inwards and wages, less closing stock, which gives Rs 3,20,000. Gross profit is therefore Rs 80,000.

  1. ARs 90,000Correct
  2. BRs 80,000
  3. CRs 70,000
  4. DRs 1,00,000

Explanation

Net sales = 4,10,000 - 10,000 = 4,00,000. Cost of goods sold = 40,000 + 3,20,000 - 20,000 + 10,000 + 30,000 - 60,000 = 3,20,000. Gross profit = 4,00,000 - 3,10,000... recomputed: 40,000+300,000+10,000+30,000 = 3,80,000; less 60,000 = 3,20,000; GP = 80,000.

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