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A started a business on 1st January 2009 with Rs. 5,00,000. During the year he bought goods worth Rs. 1,00,000 on credit and sold 80% of the same goods at profit of 20% on cost. At the end of the year 2009, the amount of opening stock to be shown in the trial balance of Mr. A will be
(a) Rs. 20,000
(b) Rs. 24,000
(c) Rs. 1,00,000
(d) Nil?
Most Upvoted Answer
A started a business on 1st January 2009 with Rs. 5,00,000. During the...
Initial Investment and Purchases
A started his business with an initial investment of Rs. 5,00,000 on 1st January 2009. During the year, he purchased goods worth Rs. 1,00,000 on credit.
Sales and Profit Calculation
- A sold 80% of the purchased goods.
- The cost of goods sold (COGS) is calculated as:
- 80% of Rs. 1,00,000 = Rs. 80,000.
- A made a profit of 20% on the cost of the sold goods:
- Profit = 20% of Rs. 80,000 = Rs. 16,000.
Closing Stock Calculation
- The remaining goods (20% of the total purchase) at the end of the year are considered as closing stock:
- Closing stock = 20% of Rs. 1,00,000 = Rs. 20,000.
Trial Balance Consideration
At the end of the year, the amount of opening stock to be shown in the trial balance of Mr. A will be:
- Opening Stock: Rs. 0 (as it is a new business)
- Purchases: Rs. 1,00,000 (purchased goods)
- Sales: Rs. 80,000 (goods sold)
- Closing Stock: Rs. 20,000 (remaining unsold goods)
Conclusion
- Therefore, the amount of closing stock to be reflected in the trial balance is Rs. 20,000.
Thus, the correct answer is (a) Rs. 20,000.
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A started a business on 1st January 2009 with Rs. 5,00,000. During the year he bought goods worth Rs. 1,00,000 on credit and sold 80% of the same goods at profit of 20% on cost. At the end of the year 2009, the amount of opening stock to be shown in the trial balance of Mr. A will be(a) Rs. 20,000(b) Rs. 24,000(c) Rs. 1,00,000(d) Nil?
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A started a business on 1st January 2009 with Rs. 5,00,000. During the year he bought goods worth Rs. 1,00,000 on credit and sold 80% of the same goods at profit of 20% on cost. At the end of the year 2009, the amount of opening stock to be shown in the trial balance of Mr. A will be(a) Rs. 20,000(b) Rs. 24,000(c) Rs. 1,00,000(d) Nil? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A started a business on 1st January 2009 with Rs. 5,00,000. During the year he bought goods worth Rs. 1,00,000 on credit and sold 80% of the same goods at profit of 20% on cost. At the end of the year 2009, the amount of opening stock to be shown in the trial balance of Mr. A will be(a) Rs. 20,000(b) Rs. 24,000(c) Rs. 1,00,000(d) Nil? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A started a business on 1st January 2009 with Rs. 5,00,000. During the year he bought goods worth Rs. 1,00,000 on credit and sold 80% of the same goods at profit of 20% on cost. At the end of the year 2009, the amount of opening stock to be shown in the trial balance of Mr. A will be(a) Rs. 20,000(b) Rs. 24,000(c) Rs. 1,00,000(d) Nil?.
Solutions for A started a business on 1st January 2009 with Rs. 5,00,000. During the year he bought goods worth Rs. 1,00,000 on credit and sold 80% of the same goods at profit of 20% on cost. At the end of the year 2009, the amount of opening stock to be shown in the trial balance of Mr. A will be(a) Rs. 20,000(b) Rs. 24,000(c) Rs. 1,00,000(d) Nil? in English & in Hindi are available as part of our courses for UPSC. Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.
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