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CA Intermediate Accounts Chap: Profit/Loss Pre and Post Incorporation
Accountancy
Can someone help me with this? In CA Intermediate Group1 Accounts, Chapter 5: Profit/Loss Pre and Post Incorporation, in the illustration no.5, how do we compute Gross Profit?
Answers (10)
Ravikumar Pandi
No need to compute Gross Profit, directly show sales (Credit) in sales ratio and Cost of goods sold (debit) in sales ratio.
Or Gross Profit = Sales - Cost of Goods Sold
Ravikumar Pandi
This is illustration 4
Yeah yeah, I'm sorry that I quoted as illustration 5 wrongly, actually I needed the answer for illustration 4.
Ravikumar Pandi
60,000 + 1,20,000 + 25,000 - 1,40,000 - 5,000 (Freight and Carriage)
Gross Profit = Sales + Closing Inventory - Purchase including Inventory - Freight and Carriage