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A new firm commenced business on 1st January, 2006 and purchased goods costing Rs. 90,000 during the year. A sum of Rs. 6,000 was spent on freight inwards. At the end of the year the cost of goods still unsold was Rs. 12,000. Sales during the year Rs. 1,20,000. What is the gross profit earned by the firm?
- a)Rs. 36,000
- b)Rs. 30,000
- c)Rs. 42,000
- d)Rs. 38,000
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
A new firm commenced business on 1st January, 2006 and purchased goods...
To determine the gross profit earned by the firm, we can follow these structured steps:
- Calculate the Total Cost of Goods Sold (COGS)
The total cost of goods purchased includes the cost of the goods and any additional expenses such as freight. Thus, we can calculate COGS as follows:
COGS = Cost of Goods + Freight Inwards − Cost of Unsold Goods
Substituting the values into the formula:
COGS = 90,000 + 6,000 − 12,000 - Perform the Calculation
Now, we can compute the COGS: COGS = 90,000 + 6,000 − 12,000 = 84,000 - Calculate Gross Profit
Gross profit is calculated by subtracting the COGS from the total sales revenue. The formula for gross profit is:
Gross Profit = Sales − COGS
Substituting the values we have:
Gross Profit = 120,000 − 84,000 - Perform the Final Calculation
Now, we can compute the gross profit:
Gross Profit = 120,000 − 84,000 = 36,000
Thus, the gross profit earned by the firm is Rs. 36,000
Most Upvoted Answer
A new firm commenced business on 1st January, 2006 and purchased goods...
Given:
- Cost of goods purchased during the year = Rs. 90,000
- Freight inwards = Rs. 6,000
- Cost of goods unsold at the end of the year = Rs. 12,000
- Sales during the year = Rs. 1,20,000
To find: Gross profit earned by the firm
Formula:
Gross Profit = Sales - Cost of goods sold
Cost of goods sold = Cost of goods purchased + Freight inwards - Cost of goods unsold
Calculation:
- Cost of goods sold = Rs. (90,000 + 6,000 - 12,000) = Rs. 84,000
- Gross profit = Rs. (1,20,000 - 84,000) = Rs. 36,000
Therefore, the gross profit earned by the firm is Rs. 36,000 (Option A).
- Cost of goods purchased during the year = Rs. 90,000
- Freight inwards = Rs. 6,000
- Cost of goods unsold at the end of the year = Rs. 12,000
- Sales during the year = Rs. 1,20,000
To find: Gross profit earned by the firm
Formula:
Gross Profit = Sales - Cost of goods sold
Cost of goods sold = Cost of goods purchased + Freight inwards - Cost of goods unsold
Calculation:
- Cost of goods sold = Rs. (90,000 + 6,000 - 12,000) = Rs. 84,000
- Gross profit = Rs. (1,20,000 - 84,000) = Rs. 36,000
Therefore, the gross profit earned by the firm is Rs. 36,000 (Option A).
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Community Answer
A new firm commenced business on 1st January, 2006 and purchased goods...
GP = Sales - COGS
GP = 120000 - (purchases + freight - closing stock)
= 120000 - 96000 + 12000 = 36000
GP = 120000 - (purchases + freight - closing stock)
= 120000 - 96000 + 12000 = 36000
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A new firm commenced business on 1st January, 2006 and purchased goods costing Rs. 90,000 during the year. A sum of Rs. 6,000 was spent on freight inwards. At the end of the year the cost of goods still unsold was Rs. 12,000. Sales during the year Rs. 1,20,000. What is the gross profit earned by the firm?a)Rs. 36,000b)Rs. 30,000c)Rs. 42,000d)Rs. 38,000Correct answer is option 'A'. Can you explain this answer?
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A new firm commenced business on 1st January, 2006 and purchased goods costing Rs. 90,000 during the year. A sum of Rs. 6,000 was spent on freight inwards. At the end of the year the cost of goods still unsold was Rs. 12,000. Sales during the year Rs. 1,20,000. What is the gross profit earned by the firm?a)Rs. 36,000b)Rs. 30,000c)Rs. 42,000d)Rs. 38,000Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A new firm commenced business on 1st January, 2006 and purchased goods costing Rs. 90,000 during the year. A sum of Rs. 6,000 was spent on freight inwards. At the end of the year the cost of goods still unsold was Rs. 12,000. Sales during the year Rs. 1,20,000. What is the gross profit earned by the firm?a)Rs. 36,000b)Rs. 30,000c)Rs. 42,000d)Rs. 38,000Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A new firm commenced business on 1st January, 2006 and purchased goods costing Rs. 90,000 during the year. A sum of Rs. 6,000 was spent on freight inwards. At the end of the year the cost of goods still unsold was Rs. 12,000. Sales during the year Rs. 1,20,000. What is the gross profit earned by the firm?a)Rs. 36,000b)Rs. 30,000c)Rs. 42,000d)Rs. 38,000Correct answer is option 'A'. Can you explain this answer?.
A new firm commenced business on 1st January, 2006 and purchased goods costing Rs. 90,000 during the year. A sum of Rs. 6,000 was spent on freight inwards. At the end of the year the cost of goods still unsold was Rs. 12,000. Sales during the year Rs. 1,20,000. What is the gross profit earned by the firm?a)Rs. 36,000b)Rs. 30,000c)Rs. 42,000d)Rs. 38,000Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A new firm commenced business on 1st January, 2006 and purchased goods costing Rs. 90,000 during the year. A sum of Rs. 6,000 was spent on freight inwards. At the end of the year the cost of goods still unsold was Rs. 12,000. Sales during the year Rs. 1,20,000. What is the gross profit earned by the firm?a)Rs. 36,000b)Rs. 30,000c)Rs. 42,000d)Rs. 38,000Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A new firm commenced business on 1st January, 2006 and purchased goods costing Rs. 90,000 during the year. A sum of Rs. 6,000 was spent on freight inwards. At the end of the year the cost of goods still unsold was Rs. 12,000. Sales during the year Rs. 1,20,000. What is the gross profit earned by the firm?a)Rs. 36,000b)Rs. 30,000c)Rs. 42,000d)Rs. 38,000Correct answer is option 'A'. Can you explain this answer?.
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