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Question 8 Chapter 1 - Unimax
8. Calculate Merchandise Cost, gross profit and net income from the following:
| Rs. | |
| Purchases (3,000 articles) | 25,000 |
| Freight | 1,500 |
| Local Taxes | 1,000 |
| Salaries | 2,500 |
| Shop Rent | 500 |
| Godown Rent | 500 |
| Electric Charges | 600 |
| Municipal Taxes | 200 |
| Stationery | 250 |
| Furniture (estimated life 5 years) | 12,000 |
| Sales (2,700 Articles) | 32,000 |
| Merchandise Cost | = Opening Stock + Net Purchases + Direct Expenses – Closing Stock (see working note) |
| = Rs. Nil +25,000 +2,500-2,750 | |
| = Rs. 24,750 | |
| Gross Profit | = Net Sales - Merchandise Cost |
| = Rs. 32,000-24,750 | |
| = Rs. 7,250 | |
| Net Income | = Gross Profit- Indirect ( Operating Expenses) |
| = Rs. 7,250- 6,950 | |
| = Rs. 300 |
| 1. Calculation of Closing Stock | |
| Total number of articles purchased | 3,000 |
| Less number of articles sold | 2,700 |
| Number of Remaining articles | 300 |
| Total Cost of 3,000 articles | 25,000 |
| Add Direct Expenses (Freight, Local Taxes) | 2,500 |
| Total Cost of 3,000 articles | 27,500 |
| If number of articles 3,000 then cost | 27,500 |
| If number of article 1 then cost | 27,500 |
| 3,000 |
| If number of articles 300 then cost = | 27,500 | X 300 articles |
| 3,000 |
Closing Stock = Rs. 2,750
2. Calculation of Indirect Expenses
| Salaries | 2,500 |
| Shop Rent | 500 |
| Godown Rent | 500 |
| Electric Charges | 600 |
| Municipal Taxes | 200 |
| Stationery | 250 |
| Depreciation on Furniture (12,000/5 years) | 2,400 |
| Indirect Expenses | 6950 |
This is all about the Question 8 Chapter 1 - Unimax. You can check out the following article to better understand:
Financial Accounting Terminology
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Financial Accounting Terminology – Explained in Hindi
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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