Question

From the following information, prepare Trading account for the year ended 31st March, 2018: Adjusted Purchases Rs. 5,50,000; Sales Rs. 6,25,000; Freight and Carriage Inwards Rs. 3,000; Wages Rs.7,000; Freight and Cartage Outwards Rs. 2,500; Closing Stock Rs. 50,000.

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.50,000) is not considered while preparing Trading Account.