CA Foundation Exam > CA Foundation Questions > A sent some goods costing Rs. 3,500 at a prof...
Start Learning for Free
A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on sale or return basis. B returned goods costing to A Rs. 800. At the end of the accounting period i.e. on 31st December, 2016, the remaining goods were neither returned nor were approved by him. The stock on approval will be shown in the balance sheet at
- a)Rs. 2,000
- b)Rs. 2,700
- c)Rs. 2,700 less 25% of Rs. 2,700
- d)Rs. 3,500
Correct answer is 'B'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Verified Answer
A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on...
When unapproved goods are existing on last day of the year, then it should be included in closing stock and valued at cost and market value whichever is lower.
Cost of remaining goods = 3500−800=2700
Market value of remaining goods (including 25% profit on sale)= (2700/(100−25))×100=3600
So Stock on approval will be shown at 2700 in balance sheet.
Cost of remaining goods = 3500−800=2700
Market value of remaining goods (including 25% profit on sale)= (2700/(100−25))×100=3600
So Stock on approval will be shown at 2700 in balance sheet.
Most Upvoted Answer
A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on...
Profit Calculation:
Cost of goods sold (COGS) = Rs. 3,500
Profit on sale to B = 25%
Profit = 25% of Rs. 3,500 = Rs. 875
Selling price = COGS + profit = Rs. 3,500 + Rs. 875 = Rs. 4,375
Goods Returned by B:
Cost of returned goods = Rs. 800
As per the sale on return basis, A will deduct the cost of returned goods from the selling price.
Amount payable by B = Selling price - cost of returned goods = Rs. 4,375 - Rs. 800 = Rs. 3,575
Remaining Goods:
The remaining goods were neither returned nor approved by B. Therefore, A cannot consider them as sold. Hence, A will show them as stock on approval in the balance sheet.
Calculation of Stock on Approval:
Selling price of goods = Rs. 4,375
Cost of goods sold (COGS) = Rs. 3,500
Profit = Rs. 875
As the remaining goods were not sold, A cannot include the profit on those goods in the balance sheet. Therefore, the stock on approval will be calculated as follows:
Cost of remaining goods = COGS - cost of returned goods = Rs. 3,500 - Rs. 800 = Rs. 2,700
Stock on approval = Cost of remaining goods = Rs. 2,700
Therefore, the correct option is B, i.e., Rs. 2,700.
Cost of goods sold (COGS) = Rs. 3,500
Profit on sale to B = 25%
Profit = 25% of Rs. 3,500 = Rs. 875
Selling price = COGS + profit = Rs. 3,500 + Rs. 875 = Rs. 4,375
Goods Returned by B:
Cost of returned goods = Rs. 800
As per the sale on return basis, A will deduct the cost of returned goods from the selling price.
Amount payable by B = Selling price - cost of returned goods = Rs. 4,375 - Rs. 800 = Rs. 3,575
Remaining Goods:
The remaining goods were neither returned nor approved by B. Therefore, A cannot consider them as sold. Hence, A will show them as stock on approval in the balance sheet.
Calculation of Stock on Approval:
Selling price of goods = Rs. 4,375
Cost of goods sold (COGS) = Rs. 3,500
Profit = Rs. 875
As the remaining goods were not sold, A cannot include the profit on those goods in the balance sheet. Therefore, the stock on approval will be calculated as follows:
Cost of remaining goods = COGS - cost of returned goods = Rs. 3,500 - Rs. 800 = Rs. 2,700
Stock on approval = Cost of remaining goods = Rs. 2,700
Therefore, the correct option is B, i.e., Rs. 2,700.
Free Test
FREE
| Start Free Test |
Community Answer
A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on...
Closing stock is always recorded at cost or Net realizable value whichever is less. If nothing is mentioned, then go for the cost price. Here cost of goods sent is rs 3500 and cost of goods received is rs 800. 3500-800=2700. So rs 2700 is the cost of the goods sent on Approval which will be shown in the baln sheet
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
A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on sale or return basis. B returned goods costing to A Rs. 800. At the end of the accounting period i.e. on 31st December, 2016, the remaining goods were neither returned nor were approved by him. The stock on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of Rs. 2,700d)Rs. 3,500Correct answer is 'B'. Can you explain this answer?
Question Description
A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on sale or return basis. B returned goods costing to A Rs. 800. At the end of the accounting period i.e. on 31st December, 2016, the remaining goods were neither returned nor were approved by him. The stock on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of Rs. 2,700d)Rs. 3,500Correct answer is 'B'. 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 A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on sale or return basis. B returned goods costing to A Rs. 800. At the end of the accounting period i.e. on 31st December, 2016, the remaining goods were neither returned nor were approved by him. The stock on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of Rs. 2,700d)Rs. 3,500Correct answer is 'B'. 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 A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on sale or return basis. B returned goods costing to A Rs. 800. At the end of the accounting period i.e. on 31st December, 2016, the remaining goods were neither returned nor were approved by him. The stock on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of Rs. 2,700d)Rs. 3,500Correct answer is 'B'. Can you explain this answer?.
A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on sale or return basis. B returned goods costing to A Rs. 800. At the end of the accounting period i.e. on 31st December, 2016, the remaining goods were neither returned nor were approved by him. The stock on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of Rs. 2,700d)Rs. 3,500Correct answer is 'B'. 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 A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on sale or return basis. B returned goods costing to A Rs. 800. At the end of the accounting period i.e. on 31st December, 2016, the remaining goods were neither returned nor were approved by him. The stock on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of Rs. 2,700d)Rs. 3,500Correct answer is 'B'. 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 A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on sale or return basis. B returned goods costing to A Rs. 800. At the end of the accounting period i.e. on 31st December, 2016, the remaining goods were neither returned nor were approved by him. The stock on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of Rs. 2,700d)Rs. 3,500Correct answer is 'B'. Can you explain this answer?.
Solutions for A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on sale or return basis. B returned goods costing to A Rs. 800. At the end of the accounting period i.e. on 31st December, 2016, the remaining goods were neither returned nor were approved by him. The stock on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of Rs. 2,700d)Rs. 3,500Correct answer is 'B'. 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 A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on sale or return basis. B returned goods costing to A Rs. 800. At the end of the accounting period i.e. on 31st December, 2016, the remaining goods were neither returned nor were approved by him. The stock on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of Rs. 2,700d)Rs. 3,500Correct answer is 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on sale or return basis. B returned goods costing to A Rs. 800. At the end of the accounting period i.e. on 31st December, 2016, the remaining goods were neither returned nor were approved by him. The stock on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of Rs. 2,700d)Rs. 3,500Correct answer is 'B'. Can you explain this answer?, a detailed solution for A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on sale or return basis. B returned goods costing to A Rs. 800. At the end of the accounting period i.e. on 31st December, 2016, the remaining goods were neither returned nor were approved by him. The stock on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of Rs. 2,700d)Rs. 3,500Correct answer is 'B'. Can you explain this answer? has been provided alongside types of A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on sale or return basis. B returned goods costing to A Rs. 800. At the end of the accounting period i.e. on 31st December, 2016, the remaining goods were neither returned nor were approved by him. The stock on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of Rs. 2,700d)Rs. 3,500Correct answer is 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice A sent some goods costing Rs. 3,500 at a profit of 25% on sale to B on sale or return basis. B returned goods costing to A Rs. 800. At the end of the accounting period i.e. on 31st December, 2016, the remaining goods were neither returned nor were approved by him. The stock on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of Rs. 2,700d)Rs. 3,500Correct answer is 'B'. 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