Question

Mahesh who keeps his books on Single Entry System sells goods at Cost plus 50%. On 1st April, 2017 his Capital was Rs. 4,00,000 and on 31st March, 2018 it was Rs. 3,50,000. He had withdrawn Rs. 20,000 per month besides goods of the sale value of Rs. 60,000. How much did he earn in 2017-18?

Answer 1

Calculation For Cost of Goods Sold:
Sales = COGS + Profit
Cost of Goods Sold = 100
***** Profit = 50
Sales = 150

***** Profit = 50/150 or 1/3

Sales = 60,000 x 1/3 = 20,000

COGS = Sales – ***** Profit = 60,000 – 20,000 = 40,000
Drawings = Cash + Cost of Goods Sold
Drawings = 2,40,000 + 40,000 = 2,80,000