Home › CA Foundation › accounting › Final Accounts of Sole Proprietors › Trial balance shows opening stock ₹50,000, purch…
Trial balance shows opening stock ₹50,000, purchases ₹2,00,000, sales ₹3,50,000. Closing stock ₹70,000. Gross profit:
A₹1,50,000 gross profit
B₹1,70,000 gross profit
C₹1,20,000 gross profit
D₹1,80,000 gross profit
Answer & Solution
Correct answer: B. ₹1,70,000 gross profit
1. COGS = 50,000 + 2,00,000 − 70,000 = 1,80,000.
2. Gross profit = 3,50,000 − 1,80,000 = ₹1,70,000.
_Source: ICAI BoS Foundation Paper 1, Ch 7 U1 "Final Accounts", §1.3 example_
Related questions
Goods worth ₹8,000 destroyed by fire; ₹6,000 recovered from insurance. The loss debited toTrial balance: capital ₹2,00,000; drawings ₹15,000; net profit for year ₹35,000. Closing cBills receivable shown as ₹20,000 in trial balance; ₹5,000 discounted but not yet matured Interest on capital is treated as:Goods costing ₹10,000 used by proprietor personally:Closing stock includes goods sent on consignment ₹15,000 (sold not yet). They should be:Manager's commission is 10% of net profit after such commission. Net profit before commissDrawings of ₹15,000 by proprietor are: