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Opening Inventory 1,00,000 Purchases 6,72,000 Carriage Inwards 30,000 Wages 50,000 Sales 11,00,000 Returns inward 1,00,000 Returns outward 72,000 Closing Inventory 2,00,000 From the above information, prepare a Trading Account of M/s. ABC Traders for the year ended 31st March, 2017 and Pass necessary closing entries in the journal proper of M/s. ABC Traders.?
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Opening Inventory 1,00,000 Purchases 6,72,000 Carriage Inwards 30,000 ...
Trading Account of M/s. ABC Traders for the year ended 31st March, 2017
| Particulars | Amount (in Rs.) |
| --- | --- |
| Opening Inventory | 1,00,000 |
| Add: Purchases | 6,72,000 |
| Add: Carriage Inwards | 30,000 |
| Less: Returns Outward | 72,000 |
| Cost of Goods Available for Sale | 7,30,000 |
| Less: Closing Inventory | 2,00,000 |
| Cost of Goods Sold | 5,30,000 |
| Gross Profit (Sales - Cost of Goods Sold) | 5,70,000 |
Journal Entries:
1. For Closing Inventory:
Closing Inventory A/c (Asset) 2,00,000
To Trading A/c (Expense) 2,00,000
2. For Gross Profit:
Trading A/c (Expense) 5,70,000
To Gross Profit A/c (Revenue) 5,70,000
Explanation:
The trading account is prepared to determine the gross profit or loss of a business. It includes all direct expenses like purchases, carriage inwards, wages, and returns inward, and indirect expenses are excluded. In this case, the opening inventory of M/s. ABC Traders was Rs. 1,00,000, purchases were Rs. 6,72,000, and carriage inwards were Rs. 30,000. The cost of goods available for sale was Rs. 7,30,000, and the closing inventory was Rs. 2,00,000. Therefore, the cost of goods sold was Rs. 5,30,000, and the gross profit was Rs. 5,70,000.
The closing entry for inventory is made to transfer the value of unsold inventory from the trading account to the balance sheet. The closing entry for gross profit is made to transfer the gross profit from the trading account to the profit and loss account.
| Particulars | Amount (in Rs.) |
| --- | --- |
| Opening Inventory | 1,00,000 |
| Add: Purchases | 6,72,000 |
| Add: Carriage Inwards | 30,000 |
| Less: Returns Outward | 72,000 |
| Cost of Goods Available for Sale | 7,30,000 |
| Less: Closing Inventory | 2,00,000 |
| Cost of Goods Sold | 5,30,000 |
| Gross Profit (Sales - Cost of Goods Sold) | 5,70,000 |
Journal Entries:
1. For Closing Inventory:
Closing Inventory A/c (Asset) 2,00,000
To Trading A/c (Expense) 2,00,000
2. For Gross Profit:
Trading A/c (Expense) 5,70,000
To Gross Profit A/c (Revenue) 5,70,000
Explanation:
The trading account is prepared to determine the gross profit or loss of a business. It includes all direct expenses like purchases, carriage inwards, wages, and returns inward, and indirect expenses are excluded. In this case, the opening inventory of M/s. ABC Traders was Rs. 1,00,000, purchases were Rs. 6,72,000, and carriage inwards were Rs. 30,000. The cost of goods available for sale was Rs. 7,30,000, and the closing inventory was Rs. 2,00,000. Therefore, the cost of goods sold was Rs. 5,30,000, and the gross profit was Rs. 5,70,000.
The closing entry for inventory is made to transfer the value of unsold inventory from the trading account to the balance sheet. The closing entry for gross profit is made to transfer the gross profit from the trading account to the profit and loss account.
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Opening Inventory 1,00,000 Purchases 6,72,000 Carriage Inwards 30,000 ...
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Opening Inventory 1,00,000 Purchases 6,72,000 Carriage Inwards 30,000 Wages 50,000 Sales 11,00,000 Returns inward 1,00,000 Returns outward 72,000 Closing Inventory 2,00,000 From the above information, prepare a Trading Account of M/s. ABC Traders for the year ended 31st March, 2017 and Pass necessary closing entries in the journal proper of M/s. ABC Traders.?
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Opening Inventory 1,00,000 Purchases 6,72,000 Carriage Inwards 30,000 Wages 50,000 Sales 11,00,000 Returns inward 1,00,000 Returns outward 72,000 Closing Inventory 2,00,000 From the above information, prepare a Trading Account of M/s. ABC Traders for the year ended 31st March, 2017 and Pass necessary closing entries in the journal proper of M/s. ABC Traders.? 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 Opening Inventory 1,00,000 Purchases 6,72,000 Carriage Inwards 30,000 Wages 50,000 Sales 11,00,000 Returns inward 1,00,000 Returns outward 72,000 Closing Inventory 2,00,000 From the above information, prepare a Trading Account of M/s. ABC Traders for the year ended 31st March, 2017 and Pass necessary closing entries in the journal proper of M/s. ABC Traders.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Opening Inventory 1,00,000 Purchases 6,72,000 Carriage Inwards 30,000 Wages 50,000 Sales 11,00,000 Returns inward 1,00,000 Returns outward 72,000 Closing Inventory 2,00,000 From the above information, prepare a Trading Account of M/s. ABC Traders for the year ended 31st March, 2017 and Pass necessary closing entries in the journal proper of M/s. ABC Traders.?.
Opening Inventory 1,00,000 Purchases 6,72,000 Carriage Inwards 30,000 Wages 50,000 Sales 11,00,000 Returns inward 1,00,000 Returns outward 72,000 Closing Inventory 2,00,000 From the above information, prepare a Trading Account of M/s. ABC Traders for the year ended 31st March, 2017 and Pass necessary closing entries in the journal proper of M/s. ABC Traders.? 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 Opening Inventory 1,00,000 Purchases 6,72,000 Carriage Inwards 30,000 Wages 50,000 Sales 11,00,000 Returns inward 1,00,000 Returns outward 72,000 Closing Inventory 2,00,000 From the above information, prepare a Trading Account of M/s. ABC Traders for the year ended 31st March, 2017 and Pass necessary closing entries in the journal proper of M/s. ABC Traders.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Opening Inventory 1,00,000 Purchases 6,72,000 Carriage Inwards 30,000 Wages 50,000 Sales 11,00,000 Returns inward 1,00,000 Returns outward 72,000 Closing Inventory 2,00,000 From the above information, prepare a Trading Account of M/s. ABC Traders for the year ended 31st March, 2017 and Pass necessary closing entries in the journal proper of M/s. ABC Traders.?.
Solutions for Opening Inventory 1,00,000 Purchases 6,72,000 Carriage Inwards 30,000 Wages 50,000 Sales 11,00,000 Returns inward 1,00,000 Returns outward 72,000 Closing Inventory 2,00,000 From the above information, prepare a Trading Account of M/s. ABC Traders for the year ended 31st March, 2017 and Pass necessary closing entries in the journal proper of M/s. ABC Traders.? in English & in Hindi are available as part of our courses for CA Foundation.
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