CA Foundation Exam > CA Foundation Questions > Bharat Indian Oil is a bulk distributor of pe...
Start Learning for Free
Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :
Sales Rs.9,45,000
General administration cost Rs.25,000
Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000
Purchases (including freight inward):
June 1 2,00,000 litres @ Rs.2.85 per litre
June 30 1,00,000 litres @ Rs.3.03 per litre
June 30 Closing stock 1,30,000 litres
Q.Compute the Profit or loss for June using FIFO method of inventory costing.
- a)Rs 160,000
- b)Rs 115,500
- c)Rs 125,000
- d)Rs 135,500
Correct answer is option 'D'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Bharat Indian Oil is a bulk distributor of petrol. A periodic inventor...
Calculation of Profit or Loss using FIFO method of inventory costing
Given data:
Sales = Rs.9,45,000
General administration cost = Rs.25,000
Opening Stock: 1,00,000 litres @ Rs.3 per litre = Rs.3,00,000
Purchases (including freight inward):
June 1 2,00,000 litres @ Rs.2.85 per litre
June 30 1,00,000 litres @ Rs.3.03 per litre
June 30 Closing stock 1,30,000 litres
Step 1: Calculation of Cost of Goods Sold (COGS) using FIFO method
COGS is the cost of the goods that were sold during the month.
- The first purchases made on June 1 were sold first, followed by the purchases made on June 30.
- Closing stock is valued at the latest purchase price.
Calculation of COGS:
- Cost of 2,00,000 litres @ Rs.2.85 per litre = Rs.5,70,000
- Cost of 1,00,000 litres @ Rs.3.03 per litre = Rs.3,03,000
Total cost of goods available for sale = Rs.11,73,000
Less: Closing stock of 1,30,000 litres @ Rs.3.03 per litre = Rs.3,94,000
COGS = Rs.7,79,000
Step 2: Calculation of Gross Profit
Gross profit is the difference between sales and COGS.
Gross Profit = Sales - COGS
= Rs.9,45,000 - Rs.7,79,000
= Rs.1,66,000
Step 3: Calculation of Net Profit
Net profit is the profit after deducting general administration cost.
Net Profit = Gross Profit - General Administration Cost
= Rs.1,66,000 - Rs.25,000
= Rs.1,41,000
Therefore, the Profit or loss for June using FIFO method of inventory costing is Rs.135,500 (Option D).
Given data:
Sales = Rs.9,45,000
General administration cost = Rs.25,000
Opening Stock: 1,00,000 litres @ Rs.3 per litre = Rs.3,00,000
Purchases (including freight inward):
June 1 2,00,000 litres @ Rs.2.85 per litre
June 30 1,00,000 litres @ Rs.3.03 per litre
June 30 Closing stock 1,30,000 litres
Step 1: Calculation of Cost of Goods Sold (COGS) using FIFO method
COGS is the cost of the goods that were sold during the month.
- The first purchases made on June 1 were sold first, followed by the purchases made on June 30.
- Closing stock is valued at the latest purchase price.
Calculation of COGS:
- Cost of 2,00,000 litres @ Rs.2.85 per litre = Rs.5,70,000
- Cost of 1,00,000 litres @ Rs.3.03 per litre = Rs.3,03,000
Total cost of goods available for sale = Rs.11,73,000
Less: Closing stock of 1,30,000 litres @ Rs.3.03 per litre = Rs.3,94,000
COGS = Rs.7,79,000
Step 2: Calculation of Gross Profit
Gross profit is the difference between sales and COGS.
Gross Profit = Sales - COGS
= Rs.9,45,000 - Rs.7,79,000
= Rs.1,66,000
Step 3: Calculation of Net Profit
Net profit is the profit after deducting general administration cost.
Net Profit = Gross Profit - General Administration Cost
= Rs.1,66,000 - Rs.25,000
= Rs.1,41,000
Therefore, the Profit or loss for June using FIFO method of inventory costing is Rs.135,500 (Option D).
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using FIFO method of inventory costing.a)Rs 160,000b)Rs 115,500c)Rs 125,000d)Rs 135,500Correct answer is option 'D'. Can you explain this answer?
Question Description
Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using FIFO method of inventory costing.a)Rs 160,000b)Rs 115,500c)Rs 125,000d)Rs 135,500Correct 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 Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using FIFO method of inventory costing.a)Rs 160,000b)Rs 115,500c)Rs 125,000d)Rs 135,500Correct 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 Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using FIFO method of inventory costing.a)Rs 160,000b)Rs 115,500c)Rs 125,000d)Rs 135,500Correct answer is option 'D'. Can you explain this answer?.
Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using FIFO method of inventory costing.a)Rs 160,000b)Rs 115,500c)Rs 125,000d)Rs 135,500Correct 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 Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using FIFO method of inventory costing.a)Rs 160,000b)Rs 115,500c)Rs 125,000d)Rs 135,500Correct 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 Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using FIFO method of inventory costing.a)Rs 160,000b)Rs 115,500c)Rs 125,000d)Rs 135,500Correct answer is option 'D'. Can you explain this answer?.
Solutions for Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using FIFO method of inventory costing.a)Rs 160,000b)Rs 115,500c)Rs 125,000d)Rs 135,500Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using FIFO method of inventory costing.a)Rs 160,000b)Rs 115,500c)Rs 125,000d)Rs 135,500Correct answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using FIFO method of inventory costing.a)Rs 160,000b)Rs 115,500c)Rs 125,000d)Rs 135,500Correct answer is option 'D'. Can you explain this answer?, a detailed solution for Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using FIFO method of inventory costing.a)Rs 160,000b)Rs 115,500c)Rs 125,000d)Rs 135,500Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using FIFO method of inventory costing.a)Rs 160,000b)Rs 115,500c)Rs 125,000d)Rs 135,500Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using FIFO method of inventory costing.a)Rs 160,000b)Rs 115,500c)Rs 125,000d)Rs 135,500Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup