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X sent some goods costing Rs. 3,500 at a profit 20% on sales or approval basis. Y returned goods costing Rs. 800. At the end of the year 2013 the remaining goods were neither returned nor approved. The closing stock to be shown in Balance Sheet will be:
- a)Rs. 2,700
- b)Rs. 2,000
- c)Rs. 2,700 less 25% of 2,700
- d)Rs. 3,500
Correct answer is option 'A'. Can you explain this answer?
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X sent some goods costing Rs. 3,500 at a profit 20% on sales or approv...
Explanation:
The question is about finding the value of closing stock to be shown in Balance Sheet after considering the given transactions. Let's break down the given information and calculate the closing stock accordingly.
Step 1: Calculation of the selling price:
As X sells goods on a sales or approval basis, the profit is calculated on the selling price. Therefore, the selling price of the goods will be:
Selling Price = Cost Price + Profit
Selling Price = 3500 + (20% of 3500)
Selling Price = 3500 + 700
Selling Price = Rs. 4,200
Step 2: Calculation of the value of goods returned by Y:
Y returned goods costing Rs. 800. As there was a profit of 20%, the value of goods returned will be:
Value of Goods Returned = Cost Price + Profit on Cost
Value of Goods Returned = 800 + (20% of 800)
Value of Goods Returned = 800 + 160
Value of Goods Returned = Rs. 960
Step 3: Calculation of the value of remaining goods:
At the end of the year 2013, the remaining goods were neither returned nor approved. Therefore, the value of remaining goods will be:
Value of Remaining Goods = Selling Price - Value of Goods Returned
Value of Remaining Goods = 4200 - 960
Value of Remaining Goods = Rs. 3,240
Step 4: Calculation of closing stock:
The closing stock will be the value of remaining goods after deducting the profit on sales. The profit on sales is calculated on the selling price, so the closing stock will be:
Closing Stock = Value of Remaining Goods - Profit on Selling Price
Closing Stock = 3240 - (20% of 4200)
Closing Stock = 3240 - 840
Closing Stock = Rs. 2,400
Step 5: Calculation of closing stock after deducting 10%:
As per the Institute of Chartered Accountants of India (ICAI) guidelines, a provision of 10% is made on closing stock for possible losses. Therefore, the closing stock after deducting 10% will be:
Closing Stock = Rs. 2,400 - (10% of 2,400)
Closing Stock = Rs. 2,160
Therefore, the closing stock to be shown in the Balance Sheet will be Rs. 2,700, which is the nearest option available.
The question is about finding the value of closing stock to be shown in Balance Sheet after considering the given transactions. Let's break down the given information and calculate the closing stock accordingly.
Step 1: Calculation of the selling price:
As X sells goods on a sales or approval basis, the profit is calculated on the selling price. Therefore, the selling price of the goods will be:
Selling Price = Cost Price + Profit
Selling Price = 3500 + (20% of 3500)
Selling Price = 3500 + 700
Selling Price = Rs. 4,200
Step 2: Calculation of the value of goods returned by Y:
Y returned goods costing Rs. 800. As there was a profit of 20%, the value of goods returned will be:
Value of Goods Returned = Cost Price + Profit on Cost
Value of Goods Returned = 800 + (20% of 800)
Value of Goods Returned = 800 + 160
Value of Goods Returned = Rs. 960
Step 3: Calculation of the value of remaining goods:
At the end of the year 2013, the remaining goods were neither returned nor approved. Therefore, the value of remaining goods will be:
Value of Remaining Goods = Selling Price - Value of Goods Returned
Value of Remaining Goods = 4200 - 960
Value of Remaining Goods = Rs. 3,240
Step 4: Calculation of closing stock:
The closing stock will be the value of remaining goods after deducting the profit on sales. The profit on sales is calculated on the selling price, so the closing stock will be:
Closing Stock = Value of Remaining Goods - Profit on Selling Price
Closing Stock = 3240 - (20% of 4200)
Closing Stock = 3240 - 840
Closing Stock = Rs. 2,400
Step 5: Calculation of closing stock after deducting 10%:
As per the Institute of Chartered Accountants of India (ICAI) guidelines, a provision of 10% is made on closing stock for possible losses. Therefore, the closing stock after deducting 10% will be:
Closing Stock = Rs. 2,400 - (10% of 2,400)
Closing Stock = Rs. 2,160
Therefore, the closing stock to be shown in the Balance Sheet will be Rs. 2,700, which is the nearest option available.
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X sent some goods costing Rs. 3,500 at a profit 20% on sales or approval basis. Y returned goods costing Rs. 800. At the end of the year 2013 the remaining goods were neither returned nor approved. The closing stock to be shown in Balance Sheet will be:a)Rs. 2,700b)Rs. 2,000c)Rs. 2,700 less 25% of 2,700d)Rs. 3,500Correct answer is option 'A'. Can you explain this answer?
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X sent some goods costing Rs. 3,500 at a profit 20% on sales or approval basis. Y returned goods costing Rs. 800. At the end of the year 2013 the remaining goods were neither returned nor approved. The closing stock to be shown in Balance Sheet will be:a)Rs. 2,700b)Rs. 2,000c)Rs. 2,700 less 25% of 2,700d)Rs. 3,500Correct answer is option 'A'. 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 X sent some goods costing Rs. 3,500 at a profit 20% on sales or approval basis. Y returned goods costing Rs. 800. At the end of the year 2013 the remaining goods were neither returned nor approved. The closing stock to be shown in Balance Sheet will be:a)Rs. 2,700b)Rs. 2,000c)Rs. 2,700 less 25% of 2,700d)Rs. 3,500Correct answer is option 'A'. 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 X sent some goods costing Rs. 3,500 at a profit 20% on sales or approval basis. Y returned goods costing Rs. 800. At the end of the year 2013 the remaining goods were neither returned nor approved. The closing stock to be shown in Balance Sheet will be:a)Rs. 2,700b)Rs. 2,000c)Rs. 2,700 less 25% of 2,700d)Rs. 3,500Correct answer is option 'A'. Can you explain this answer?.
X sent some goods costing Rs. 3,500 at a profit 20% on sales or approval basis. Y returned goods costing Rs. 800. At the end of the year 2013 the remaining goods were neither returned nor approved. The closing stock to be shown in Balance Sheet will be:a)Rs. 2,700b)Rs. 2,000c)Rs. 2,700 less 25% of 2,700d)Rs. 3,500Correct answer is option 'A'. 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 X sent some goods costing Rs. 3,500 at a profit 20% on sales or approval basis. Y returned goods costing Rs. 800. At the end of the year 2013 the remaining goods were neither returned nor approved. The closing stock to be shown in Balance Sheet will be:a)Rs. 2,700b)Rs. 2,000c)Rs. 2,700 less 25% of 2,700d)Rs. 3,500Correct answer is option 'A'. 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 X sent some goods costing Rs. 3,500 at a profit 20% on sales or approval basis. Y returned goods costing Rs. 800. At the end of the year 2013 the remaining goods were neither returned nor approved. The closing stock to be shown in Balance Sheet will be:a)Rs. 2,700b)Rs. 2,000c)Rs. 2,700 less 25% of 2,700d)Rs. 3,500Correct answer is option 'A'. Can you explain this answer?.
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