Problem 4 Chapter 1 - Unimax Publications of Class 11

Problem 4 Chapter 1 - Unimax Publications of Class 11

From the following calculate
(i) Gross Profit and (ii) Net Profit

	Rs.
Opening Stock	2,500
Closing Stock	2,300
Purchases	97,000
Sales	1,00,000
Purchases Returns	2,000
Direct Expenses	1,200
Indirect Expenses	8,000

The solution of Problem 4 Chapter 1 - Unimax Publications of Class 11

(i) Cost of goods sold	= Opening Stock + Net Purchases + Direct Expenses – Closing Stock
Net Purchases	= Purchases-Purchases Returns
	= Rs. 97,000-2,000
	= Rs. 95,000
Cost of goods sold	= Rs. 2,500+95,000+1,200-2,300
	= Rs. 96,400

(ii) Gross Profit	= Net Sales - Cost of goods sold
	= Rs. (1,00,000-96,400)
	= Rs. 3,600

(iii) Net Loss	= Indirect Expenses-Gross Profit
	= Rs. 8,000-3,600
	= Rs. 4,400

Note: Since, Indirect Expenses are more than gross profit. So, the result is net loss.