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X who was closing his books on 31.03.2006 failed to take the actual stock which he did on 9th April, when it was ascertained by him to be worth Rs 25,000.
It was found that sales are entered in the Sales Day Book on the same day of despatch and the returns inward in the returns book as and when the goods are received back. Purchases are entered in the Purchase Day Book once the invoices are received. Observations -
i. Sales between 31st March and 9th April as per Sales Book are Rs 1,720. Rate of gross profit is 33 1/3 % on cost.
ii. Purchases during the same period as per Purchases Book are Rs 120.
iii. Out of above purchases, goods amounting to Rs 50 were not received until after the stock was taken.
iv. Goods invoiced during the month of March, but goods received only on 4th April, amounted to Rs 100.
You want to find the value of physical stock on 31st March. You start with the value of stock on 9th April.
 
Q.How would you adjust the observation # 1?
  • a)
    1,720 (Less)
  • b)
    1,290 (Less)
  • c)
    430
  • d)
    1,290 (Add)
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
X who was closing his books on 31.03.2006 failed to take the actual st...
Adjustment of Observation #1:

Sales between 31st March and 9th April:
- Sales as per Sales Book: Rs 1,720
- Gross profit rate: 33 1/3 % on cost

Calculation:
- Gross profit on cost = Sales / (1 + Gross profit rate)
- Gross profit on cost = Rs 1,720 / (1 + 33 1/3 %)
- Gross profit on cost = Rs 1,720 / (4/3) = Rs 1,290

Adjustment:
- The sales figure in the Sales Book needs to be adjusted by the gross profit amount to arrive at the cost of sales.
- Cost of sales = Sales - Gross profit
- Cost of sales = Rs 1,720 - Rs 1,290
- Cost of sales = Rs 430
Therefore, the adjustment for Observation #1 would be to subtract Rs 1,290 from the sales figure of Rs 1,720, resulting in Rs 430.
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X who was closing his books on 31.03.2006 failed to take the actual stock which he did on 9th April, when it was ascertained by him to be worth Rs 25,000.It was found that sales are entered in the Sales Day Book on the same day of despatch and the returns inward in the returns book as and when the goods are received back. Purchases are entered in the Purchase Day Book once the invoices are received. Observations -i. Sales between 31st March and 9th April as per Sales Book are Rs 1,720. Rate of gross profit is 33 1/3 % on cost.ii. Purchases during the same period as per Purchases Book are Rs 120.iii. Out of above purchases, goods amounting to Rs 50 were not received until after the stock was taken.iv. Goods invoiced during the month of March, but goods received only on 4th April, amounted to Rs 100.You want to find the value of physical stock on 31st March. You start with the value of stock on 9th April.Q.How would you adjust the observation # 1?a)1,720 (Less)b)1,290 (Less)c)430d)1,290 (Add)Correct answer is option 'D'. Can you explain this answer?
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X who was closing his books on 31.03.2006 failed to take the actual stock which he did on 9th April, when it was ascertained by him to be worth Rs 25,000.It was found that sales are entered in the Sales Day Book on the same day of despatch and the returns inward in the returns book as and when the goods are received back. Purchases are entered in the Purchase Day Book once the invoices are received. Observations -i. Sales between 31st March and 9th April as per Sales Book are Rs 1,720. Rate of gross profit is 33 1/3 % on cost.ii. Purchases during the same period as per Purchases Book are Rs 120.iii. Out of above purchases, goods amounting to Rs 50 were not received until after the stock was taken.iv. Goods invoiced during the month of March, but goods received only on 4th April, amounted to Rs 100.You want to find the value of physical stock on 31st March. You start with the value of stock on 9th April.Q.How would you adjust the observation # 1?a)1,720 (Less)b)1,290 (Less)c)430d)1,290 (Add)Correct answer is option 'D'. 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 X who was closing his books on 31.03.2006 failed to take the actual stock which he did on 9th April, when it was ascertained by him to be worth Rs 25,000.It was found that sales are entered in the Sales Day Book on the same day of despatch and the returns inward in the returns book as and when the goods are received back. Purchases are entered in the Purchase Day Book once the invoices are received. Observations -i. Sales between 31st March and 9th April as per Sales Book are Rs 1,720. Rate of gross profit is 33 1/3 % on cost.ii. Purchases during the same period as per Purchases Book are Rs 120.iii. Out of above purchases, goods amounting to Rs 50 were not received until after the stock was taken.iv. Goods invoiced during the month of March, but goods received only on 4th April, amounted to Rs 100.You want to find the value of physical stock on 31st March. You start with the value of stock on 9th April.Q.How would you adjust the observation # 1?a)1,720 (Less)b)1,290 (Less)c)430d)1,290 (Add)Correct answer is option 'D'. 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 X who was closing his books on 31.03.2006 failed to take the actual stock which he did on 9th April, when it was ascertained by him to be worth Rs 25,000.It was found that sales are entered in the Sales Day Book on the same day of despatch and the returns inward in the returns book as and when the goods are received back. Purchases are entered in the Purchase Day Book once the invoices are received. Observations -i. Sales between 31st March and 9th April as per Sales Book are Rs 1,720. Rate of gross profit is 33 1/3 % on cost.ii. Purchases during the same period as per Purchases Book are Rs 120.iii. Out of above purchases, goods amounting to Rs 50 were not received until after the stock was taken.iv. Goods invoiced during the month of March, but goods received only on 4th April, amounted to Rs 100.You want to find the value of physical stock on 31st March. You start with the value of stock on 9th April.Q.How would you adjust the observation # 1?a)1,720 (Less)b)1,290 (Less)c)430d)1,290 (Add)Correct answer is option 'D'. Can you explain this answer?.
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Out of above purchases, goods amounting to Rs 50 were not received until after the stock was taken.iv. Goods invoiced during the month of March, but goods received only on 4th April, amounted to Rs 100.You want to find the value of physical stock on 31st March. You start with the value of stock on 9th April.Q.How would you adjust the observation # 1?a)1,720 (Less)b)1,290 (Less)c)430d)1,290 (Add)Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of X who was closing his books on 31.03.2006 failed to take the actual stock which he did on 9th April, when it was ascertained by him to be worth Rs 25,000.It was found that sales are entered in the Sales Day Book on the same day of despatch and the returns inward in the returns book as and when the goods are received back. Purchases are entered in the Purchase Day Book once the invoices are received. Observations -i. Sales between 31st March and 9th April as per Sales Book are Rs 1,720. Rate of gross profit is 33 1/3 % on cost.ii. Purchases during the same period as per Purchases Book are Rs 120.iii. Out of above purchases, goods amounting to Rs 50 were not received until after the stock was taken.iv. Goods invoiced during the month of March, but goods received only on 4th April, amounted to Rs 100.You want to find the value of physical stock on 31st March. You start with the value of stock on 9th April.Q.How would you adjust the observation # 1?a)1,720 (Less)b)1,290 (Less)c)430d)1,290 (Add)Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice X who was closing his books on 31.03.2006 failed to take the actual stock which he did on 9th April, when it was ascertained by him to be worth Rs 25,000.It was found that sales are entered in the Sales Day Book on the same day of despatch and the returns inward in the returns book as and when the goods are received back. Purchases are entered in the Purchase Day Book once the invoices are received. Observations -i. Sales between 31st March and 9th April as per Sales Book are Rs 1,720. Rate of gross profit is 33 1/3 % on cost.ii. Purchases during the same period as per Purchases Book are Rs 120.iii. Out of above purchases, goods amounting to Rs 50 were not received until after the stock was taken.iv. Goods invoiced during the month of March, but goods received only on 4th April, amounted to Rs 100.You want to find the value of physical stock on 31st March. You start with the value of stock on 9th April.Q.How would you adjust the observation # 1?a)1,720 (Less)b)1,290 (Less)c)430d)1,290 (Add)Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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