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Question
Calculate the amount of gross profit and operating profit on the basis of the following balances extracted from the books of M/s Rajiv and Sons for the year ended March 31, 2017.
| ₹ | |
| Opening stock | 50,000 |
| Net sales | 11,00,000 |
| Net purchases | 6,00,000 |
| Direct expenses | 60,000 |
| Administration expenses | 45,000 |
| Selling and distribution expenses | 65,000 |
| Loss due to fire | 20,000 |
| Closing stock | 70,000 |
Solution
| Dr. | Trading Account as of March 31, 2017 | Cr. | |
| Particulars | Amount (₹) | Particulars | Amount (₹) |
| Opening Stock | 50,000 | Net Sales | 11,00,000 |
| Net Purchases | 6,00,000 | Closing Stock | 70,000 |
| Direct Expenses | 60,000 | ||
| Gross Profit | 4,60,000 | ||
| 11,70,000 | 11,70,000 | ||
Operating Profit = Net profit + Non operating expenses – Non operating incomes
Operating Profit = Sales – (Opening Stock + Net Purchases + Direct Expenses + Administration Expenses + Selling and Distribution Expenses) + Closing Stock
= 11,00,000 – (50,000 + 6,00,000 + 60,000 + 45,000 + 65,000) + 70,000
= 11,00,00 – 8,20,000 + 70,000
= ₹ 3,50,000
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| Account title | Debit ₹ |
Credit ₹ |
| Opening Stock | 2,00,000 | |
| Purchases | 8,10,000 | |
| Sales | 10,10,000 | |
| 10,10,000 | 10,10,000 |
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| Drawings | 2,700 | Sundry creditors | 1,400 |
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| Rent and taxes | 1,350 | ||
| Carriage inwards | 450 | ||
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| Discount | 3,000 | ||
| Advertisement | 500 | ||
| Drawings | 1,000 | ||
| Loan | 6,000 | ||
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| Sales return | 1,000 | ||
| Machinery | 5,000 | ||
| Land and building | 10,000 | ||
| Income tax | 100 | ||
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| Repairs | 2,400 | |
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| Wages and salaries | 28,800 | |
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| Miscellaneous receipts | 160 | |
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Credit Amount ₹ |
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| Bad debts | 600 | |
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Credit balances | Amount ₹ |
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| Commission | 10,000 | Creditors | 28,000 |
| Wages | 11,000 | Bills payable | 2,370 |
| Rent and taxes | 2,800 | ||
| Repairs | 5,000 | ||
| Telephone expenses | 1,400 | ||
| Legal charges | 1,500 | ||
| Sundry expenses | 2,500 | ||
| cash in hand | 12,000 | ||
| Debtors | 30,000 | ||
| Machinery | 60,000 | ||
| Investments | 90,000 | ||
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Credit Amount ₹ |
| Opening stock | 50,000 | |
| Purchases and sales | 3,50,000 | 4,21,000 |
| Sales returns | 5,000 | |
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| Commission | 4,000 | |
| Creditors | 1,00,000 | |
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| Cash in hand | 32,000 | |
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| Debtors | 1,40,000 | |
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| Bad debts | 7,000 | |
| Drawings | 24,000 | |
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Closing stock as on March 31, 2017 ₹ 2,500
Calculate the amount of gross profit and operating profit on the basis of the following balances extracted from the books of M/s Rajiv & Sons for the year ended March 31, 2017.
| ₹ | |
| Opening stock | 50,000 |
| Net sales | 11,00,000 |
| Net purchases | 6,00,000 |
| Direct expenses | 60,000 |
| Administration expenses | 45,000 |
| Selling and distribution Expenses | 65,000 |
| Loss due to fire | 20,000 |
| Closing stock | 70,000 |
Calculate the amount of gross profit and operating profit on the basis of the following balances extracted from the books of M/s Rajiv & Sons for the year ended March 31, 2017.
| ₹ | |
| Opening stock | 50,000 |
| Net sales | 11,00,000 |
| Net purchases | 6,00,000 |
| Direct expenses | 60,000 |
| Administration expenses | 45,000 |
| Selling and distribution expenses | 65,000 |
| Loss due to fire | 20,000 |
| Closing stock | 70,000 |
Calculate the amount of gross profit and operating profit on the basis of the following balances extracted from the books of M/s Rajiv & Sons for the year ended March 31, 2017.
| ₹ | |
| Opening stock | 50,000 |
| Net sales | 11,00,000 |
| Net purchases | 6,00,000 |
| Direct expenses | 60,000 |
| Administration expenses | 45,000 |
| Selling and distribution expenses | 65,000 |
| Loss due to fire | 20,000 |
| Closing stock | 70,000 |
Calculate the amount of gross profit and operating profit on the basis of the following balances extracted from the books of M/s Rajiv & Sons for the year ended March 31, 2017.
| Particulars | ₹ |
| Opening stock | 50,000 |
| Net sales | 11,00,000 |
| Net purchases | 6,00,000 |
| Direct expenses | 60,000 |
| Administration expenses | 45,000 |
| Selling and distribution expenses | 65,000 |
| Loss due to fire | 20,000 |
| Closing stock | 70,000 |
