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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 Rs.800. At the end of the accounting period i.e. on 31st December, 2009, the remaining goods were neither returned nor were approved by him. The inventory sent 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 2,700
  • d)
    Rs. 3,500
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
A sent some goods costing Rs.3,500 at a profit of 25% on sale to B on ...
Given information:
- Goods costing Rs. 3,500 sold to B on sale or return basis at a profit of 25%
- B returned goods costing Rs. 800
- Remaining goods were neither returned nor approved by B

To find:
- Inventory sent on approval to be shown in the balance sheet

Solution:
Calculating the profit earned on goods sold to B:
- Cost price of goods = Rs. 3,500
- Profit earned = 25% of cost price = 25/100 * 3,500 = Rs. 875
- Selling price of goods = Cost price + Profit = 3,500 + 875 = Rs. 4,375

Calculating the value of goods not returned or approved by B:
- Value of goods sent on sale or return basis = Rs. 4,375
- Value of goods returned by B = Rs. 800
- Value of goods not returned or approved = Value of goods sent - Value of goods returned = 4,375 - 800 = Rs. 3,575

Therefore, the inventory sent on approval to be shown in the balance sheet is Rs. 2,700 (i.e. value of goods not returned or approved).
Free Test
Community Answer
A sent some goods costing Rs.3,500 at a profit of 25% on sale to B on ...
Cost of goods = 3500 (in addition with profit)
Goods returned = 800
====3500-800=2700
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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 Rs.800. At the end of the accounting period i.e. on 31st December, 2009, the remaining goods were neither returned nor were approved by him. The inventory sent on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of 2,700d)Rs. 3,500Correct answer is option 'B'. Can you explain this answer?
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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 Rs.800. At the end of the accounting period i.e. on 31st December, 2009, the remaining goods were neither returned nor were approved by him. The inventory sent on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of 2,700d)Rs. 3,500Correct answer is option '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 Rs.800. At the end of the accounting period i.e. on 31st December, 2009, the remaining goods were neither returned nor were approved by him. The inventory sent on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of 2,700d)Rs. 3,500Correct answer is option '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 Rs.800. At the end of the accounting period i.e. on 31st December, 2009, the remaining goods were neither returned nor were approved by him. The inventory sent on approval will be shown in the balance sheet ata)Rs. 2,000b)Rs. 2,700c)Rs. 2,700 less 25% of 2,700d)Rs. 3,500Correct answer is option 'B'. Can you explain this answer?.
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