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On 31st December, 2005 goods sold at a sale price of Rs. 30,000 were lying with customer, Mohan to whom these goods were sold on 'sale or return basis' and recorded as actual sales. Since no consent was received from Mohan, the adjustment entry was made presuming goods were sent on approval at a profit of cost plus 20%. In the balance sheet, the stock with customers account will be shown at Rs.
  • a)
    30,000.
  • b)
     24,000.
  • c)
    20,000.
  • d)
    25,000.
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
On 31st December, 2005 goods sold at a sale price of Rs. 30,000 were l...
25000

WN-
assume Cost price =100
profit on cp = 20% = 20
Selling price = 120 (cp+p)
by direct relation
cp sp
100 120
x 30000

x= 25000
Free Test
Community Answer
On 31st December, 2005 goods sold at a sale price of Rs. 30,000 were l...
Explanation:

- Sale or return basis: This means that the goods were sold to Mohan on the condition that he can return them within a specified period of time if he is not satisfied with them.
- Recorded as actual sales: This means that the goods were treated as sold and the revenue was recognized in the books of accounts even though the ownership of the goods had not been transferred to Mohan.
- No consent received: This means that Mohan did not give his approval for the sale of goods.
- Adjustment entry made presuming goods were sent on approval: This means that the transaction was treated as if the goods were sent to Mohan on approval basis, which means that the ownership of the goods would not be transferred until Mohan gives his approval.
- Profit of cost plus 20%: This means that the goods were sold at a price that was 20% higher than their cost price.
- Stock with customers account: This is an account in the balance sheet that shows the value of goods that have been sold to customers but have not been paid for or returned.

Now, let's calculate the value of goods that were sold to Mohan:

- Sale price = Rs. 30,000
- Profit of cost plus 20% = 20% of cost price = 20% of (sale price / 1.2) = Rs. 5,000
- Cost price = sale price - profit = Rs. 30,000 - Rs. 5,000 = Rs. 25,000

Since the goods were treated as sold and the revenue was recognized, the value of stock with customers account will be the cost price of the goods, which is Rs. 25,000. Therefore, the correct answer is option D.
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On 31st December, 2005 goods sold at a sale price of Rs. 30,000 were lying with customer, Mohan to whom these goods were sold on 'sale or return basis' and recorded as actual sales. Since no consent was received from Mohan, the adjustment entry was made presuming goods were sent on approval at a profit of cost plus 20%. In the balance sheet, the stock with customers account will be shown at Rs.a)30,000.b)24,000.c)20,000.d)25,000.Correct answer is option 'D'. Can you explain this answer?
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On 31st December, 2005 goods sold at a sale price of Rs. 30,000 were lying with customer, Mohan to whom these goods were sold on 'sale or return basis' and recorded as actual sales. Since no consent was received from Mohan, the adjustment entry was made presuming goods were sent on approval at a profit of cost plus 20%. In the balance sheet, the stock with customers account will be shown at Rs.a)30,000.b)24,000.c)20,000.d)25,000.Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On 31st December, 2005 goods sold at a sale price of Rs. 30,000 were lying with customer, Mohan to whom these goods were sold on 'sale or return basis' and recorded as actual sales. Since no consent was received from Mohan, the adjustment entry was made presuming goods were sent on approval at a profit of cost plus 20%. In the balance sheet, the stock with customers account will be shown at Rs.a)30,000.b)24,000.c)20,000.d)25,000.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 31st December, 2005 goods sold at a sale price of Rs. 30,000 were lying with customer, Mohan to whom these goods were sold on 'sale or return basis' and recorded as actual sales. Since no consent was received from Mohan, the adjustment entry was made presuming goods were sent on approval at a profit of cost plus 20%. In the balance sheet, the stock with customers account will be shown at Rs.a)30,000.b)24,000.c)20,000.d)25,000.Correct answer is option 'D'. Can you explain this answer?.
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