Trading Accounts - Principles of Accounting, Accountancy and Financial management Video Lecture | Accountancy and Financial Management - B Com

from the following figures ascertain the
gross profit by preparing trading
account opening stock 25,000 goods
purchased one lakh 30,000 freight and
packing expenses five thousand closing
stocks 15,000 sales 1 lakh 90,000 and
selling expenses on sales nine thousand
so how do we prepare a trading account
format - opening stock is 25,000 - goods
purchased there for two purchases one
lakh 30,000 freight packing on purchases
- direct expenses 5000 by sales 1 lakh
90,000 by closing stock 15,000 and what
about the selling expenses selling
expenses is not a cost of purchase it's
a cost of sales that will not come in de
that will not appear in that training
naka so have we covered everything we
have taken opening stock 25,000 goods
purchase one bike 30,000 direct expenses
5000 closing stock of 15,000 and sales
of 1 lakh 90,000 so what do we get now
we get total of 2 lat 5,000 we are just
balancing this like we balanced any
other ledger account and what we get is
45,000 is the gross profit transferred
to trading account debit to profit and
loss account transferred to profit and
loss 45,000 is the gross profit
transferred to profit transferred to
profit and loss account if we get the
same thing if we take it in the equation
format where we had said cross
it would be equal to sales minus cost of
goods sold so what was her cost of goods
sold cost of goods sold is nothing but
opening stock of 25,000 plus goods
purchased of 1 lakh 30 thousand less
closing stock aww of 15,000 is the cost
of goods plus very cost that we have of
5000 this is a cost of course this is
how much is this this is 10 that is
equal to 1 lakh 45,000 it's the cost of
constant so gross profit is equal to 1
lakh 90,000 sales minus 1 lakh 45,000
equal to 45,000 equation the same thing
is reflected in a FIFA this is how a
trading account is prepared on a
particular date we take the opening
stock plus purchases plus all that it
expenses less closing stock to give us
the cost of goods sold sales minus the
cost of goods sold gives us the gross
profit or gross loss which is taken to
the profit and loss account next if you
take an example units purchased five
thousand at the rate of 20 each direct
expenses incurred five thousand 4/5 of
the units were sold at the rate of 25
per unit what will be the profit 4/5
units purchased is five thousand 4/5 of
the units were sold that two-piece 25
per unit I'll just discuss a slightly
different way of doing the same thing
and then we can also prepare the trading
account we can also change by equation
4/5 of the units sold means the number
of units sold is 4/5 of 5000 equal to
4000 so what is the profit that you have
made the profit that you have made is
per unit you the say cost is that the
sale price was 25 and you purchased at
the rate of 20 just like our mobile
phone example you
basically making a profit of five rupees
per unit five rupees per unit so what is
the profit you must have made Ross
profit must be equal to rupees five per
unit into how many units sold into four
thousand units sold equal to twenty
thousand less I had other direct cost of
five thousand dialect cost and therefore
we will get GP of fifteen thousand we
will get GP of fifty now if we check if
we prepare a trading account to check
the same thing let us see what we get we
don't seem to have an opening stock we
have a purchase cost of five thousand
into 20 which is 1 lakh direct expenses
of five thousand what is the sales value
sales value is four thousand into twenty
five again that is one lakh and we have
a closing stock closing stock is how
much closing stock is one thousand units
because five thousand units were
purchased 4/5 was sold one-fifth of five
thousand or one thousand units remain
into twenty if you balance this you get
a total of one lakh twenty and a gross
profit of fifteen thousand and a cross
profit of fifteen thousand which is the
same here which is the same if you
prepare prepare a trading account if you
prepare that training so the correct
answer here none of these none of the
above the correct cross profit is
actually fifteen thousand whether I do
it by trading account or this is a
simpler version of the equation nothing
simpler version of you equation what was
the equation opening stock cost of goods
sold was opening stock plus purchases I
have this as purchases minus closing
stock plus panic expenses sales minus
the cost of goods sold would be 15,000