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On 31st March, 2011, the books of Ajit showed a net profit of Rs. 84,000. Later it was discovered that the closing stock was overvalued, by Rs. 4,000 and the discount received or Rs. 1,500 was treated as an expense. What was the correct net profit of Ajit?
- a)Rs. 81,500
- b)Rs. 83,000
- c)Rs. 89,500
- d)Rs. 91,000
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
On 31st March, 2011, the books of Ajit showed a net profit of Rs. 84,0...
Explanation :
Since stock is over valued so it will be deducted from the net profit. Now the net profit is (84,000 - 4,000) = 80,000.
I hope this much is crystal clear.
Now since the discount received was treated as an expense so we will have to credit it to nullify its effect and also add the discount received which will be shown on credit side. Now the sum of both items on credit side is 3,000. Thus, the net profit (80,000 + 3,000) = 83,000.
Cheers!!
Since stock is over valued so it will be deducted from the net profit. Now the net profit is (84,000 - 4,000) = 80,000.
I hope this much is crystal clear.
Now since the discount received was treated as an expense so we will have to credit it to nullify its effect and also add the discount received which will be shown on credit side. Now the sum of both items on credit side is 3,000. Thus, the net profit (80,000 + 3,000) = 83,000.
Cheers!!
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Community Answer
On 31st March, 2011, the books of Ajit showed a net profit of Rs. 84,0...
Calculation of correct net profit of Ajit:
- Given net profit = Rs. 84,000
- Overvaluation of closing stock = Rs. 4,000 (reduces profit)
- Discount received treated as expense = Rs. 1,500 (reduces profit)
Adjustments to be made:
- Reduce the value of closing stock by Rs. 4,000
- Add back the discount treated as expense, i.e. Rs. 1,500
Correct net profit of Ajit = Net profit - Overvaluation + Expense adjustment
= Rs. 84,000 - Rs. 4,000 + Rs. 1,500
= Rs. 83,000
Therefore, the correct net profit of Ajit is Rs. 83,000, which is option B.
- Given net profit = Rs. 84,000
- Overvaluation of closing stock = Rs. 4,000 (reduces profit)
- Discount received treated as expense = Rs. 1,500 (reduces profit)
Adjustments to be made:
- Reduce the value of closing stock by Rs. 4,000
- Add back the discount treated as expense, i.e. Rs. 1,500
Correct net profit of Ajit = Net profit - Overvaluation + Expense adjustment
= Rs. 84,000 - Rs. 4,000 + Rs. 1,500
= Rs. 83,000
Therefore, the correct net profit of Ajit is Rs. 83,000, which is option B.
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On 31st March, 2011, the books of Ajit showed a net profit of Rs. 84,000. Later it was discovered that the closing stock was overvalued, by Rs. 4,000 and the discount received or Rs. 1,500 was treated as an expense. What was the correct net profit of Ajit?a)Rs. 81,500b)Rs. 83,000c)Rs. 89,500d)Rs. 91,000Correct answer is option 'B'. Can you explain this answer?
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On 31st March, 2011, the books of Ajit showed a net profit of Rs. 84,000. Later it was discovered that the closing stock was overvalued, by Rs. 4,000 and the discount received or Rs. 1,500 was treated as an expense. What was the correct net profit of Ajit?a)Rs. 81,500b)Rs. 83,000c)Rs. 89,500d)Rs. 91,000Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On 31st March, 2011, the books of Ajit showed a net profit of Rs. 84,000. Later it was discovered that the closing stock was overvalued, by Rs. 4,000 and the discount received or Rs. 1,500 was treated as an expense. What was the correct net profit of Ajit?a)Rs. 81,500b)Rs. 83,000c)Rs. 89,500d)Rs. 91,000Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 31st March, 2011, the books of Ajit showed a net profit of Rs. 84,000. Later it was discovered that the closing stock was overvalued, by Rs. 4,000 and the discount received or Rs. 1,500 was treated as an expense. What was the correct net profit of Ajit?a)Rs. 81,500b)Rs. 83,000c)Rs. 89,500d)Rs. 91,000Correct answer is option 'B'. Can you explain this answer?.
On 31st March, 2011, the books of Ajit showed a net profit of Rs. 84,000. Later it was discovered that the closing stock was overvalued, by Rs. 4,000 and the discount received or Rs. 1,500 was treated as an expense. What was the correct net profit of Ajit?a)Rs. 81,500b)Rs. 83,000c)Rs. 89,500d)Rs. 91,000Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On 31st March, 2011, the books of Ajit showed a net profit of Rs. 84,000. Later it was discovered that the closing stock was overvalued, by Rs. 4,000 and the discount received or Rs. 1,500 was treated as an expense. What was the correct net profit of Ajit?a)Rs. 81,500b)Rs. 83,000c)Rs. 89,500d)Rs. 91,000Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 31st March, 2011, the books of Ajit showed a net profit of Rs. 84,000. Later it was discovered that the closing stock was overvalued, by Rs. 4,000 and the discount received or Rs. 1,500 was treated as an expense. What was the correct net profit of Ajit?a)Rs. 81,500b)Rs. 83,000c)Rs. 89,500d)Rs. 91,000Correct answer is option 'B'. Can you explain this answer?.
Solutions for On 31st March, 2011, the books of Ajit showed a net profit of Rs. 84,000. Later it was discovered that the closing stock was overvalued, by Rs. 4,000 and the discount received or Rs. 1,500 was treated as an expense. What was the correct net profit of Ajit?a)Rs. 81,500b)Rs. 83,000c)Rs. 89,500d)Rs. 91,000Correct answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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ample number of questions to practice On 31st March, 2011, the books of Ajit showed a net profit of Rs. 84,000. Later it was discovered that the closing stock was overvalued, by Rs. 4,000 and the discount received or Rs. 1,500 was treated as an expense. What was the correct net profit of Ajit?a)Rs. 81,500b)Rs. 83,000c)Rs. 89,500d)Rs. 91,000Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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