Question

From the following information, prepare Trading Account for the year ended 31st March, 2018: Adjusted Purchases Rs. 6,60,000; Sales Rs. 7,44,000; Closing Stock Rs. 50,400; Freight and Carriage Inwards Rs. 3,600; Wages Rs. 6,000; Freight and Cartage Outwards Rs.2,000.

Answer 1

Note :
1. Freight and Carriage Outwards are not a Direct Expense. Thus, it is not recorded in the trading Account.
2. Adjusted Purchases = Opening Stock + Net Purchases – Closing Stock
Therefore, Closing Stock (Rs.50,400) is not considered while preparing Trading Account.