CBSE Class 11 Accountancy: NCERT Solutions for Financial Statements - I

To calculate the Gross Profit, we need to prepare a Trading Account. The Trading Account shows the direct costs and revenues related to the purchase and sale of goods.

The formula for Gross Profit is: Gross Profit = Net Sales - Cost of Goods Sold.

First, let's calculate the Cost of Goods Sold (COGS):

$$COGS\; =\; Opening\; Stock\; +\; Net\; Purchases\; +\; Direct\; Expenses\; -\; Closing\; Stock$$

Substituting the given values:

$$COGS\; =\; 15,00,000\; +\; 15,00,000\; +\; 80,000\; -\; 2,50,000$$

$$COGS\; =\; 30,80,000\; -\; 2,50,000$$

$$COGS\; =\; 28,30,000$$

Now, we can calculate the Gross Profit:

$$Gross\; Profit\; =\; Net\; Sales\; -\; COGS$$

$$Gross\; Profit\; =\; 40,00,000\; -\; 28,30,000$$

$$Gross\; Profit\; =\; 11,70,000$$

Alternatively, we can present this in a Trading Account format:

The Gross Profit is Rs 11,70,000.

We need to calculate three key figures: Cost of Goods Available for Sale, Cost of Goods Sold, and Gross Profit.

1. Cost of Goods Available for Sale:

   This represents the total cost of all goods that were available to be sold during the accounting period. It is calculated as Opening Stock plus Net Purchases.

   First, let's determine Net Purchases:

   $$Net\; Purchases\; =\; Credit\; Purchases\; +\; Cash\; Purchases\; -\; Purchases\; Return$$

   $$Net\; Purchases\; =\; 7,50,000\; +\; 3,00,000\; -\; 10,000$$

   $$Net\; Purchases\; =\; 10,50,000\; -\; 10,000$$

   $$Net\; Purchases\; =\; 10,40,000$$

   Now, calculate the Cost of Goods Available for Sale:

   $$Cost\; of\; Goods\; Available\; for\; Sale\; =\; Opening\; Stock\; +\; Net\; Purchases$$

   $$Cost\; of\; Goods\; Available\; for\; Sale\; =\; 25,000\; +\; 10,40,000$$

   $$Cost\; of\; Goods\; Available\; for\; Sale\; =\; 10,65,000$$

2. Cost of Goods Sold (COGS) during the year:

   This is the direct cost of the merchandise sold by the company. It can be calculated using the formula:

   $$COGS\; =\; Opening\; Stock\; +\; Net\; Purchases\; +\; Direct\; Expenses\; -\; Closing\; Stock$$

   In this case, Wages are considered a direct expense.

   $$COGS\; =\; 25,000\; +\; 10,40,000\; +\; 1,00,000\; -\; 30,000$$

   $$COGS\; =\; 11,65,000\; -\; 30,000$$

   $$COGS\; =\; 11,35,000$$

   Alternatively, COGS can be calculated as Cost of Goods Available for Sale minus Closing Stock:

   $$COGS\; =\; Cost\; of\; Goods\; Available\; for\; Sale\; -\; Closing\; Stock$$

   $$COGS\; =\; 10,65,000\; -\; 30,000$$

   $$COGS\; =\; 10,35,000$$

   There seems to be a discrepancy in the provided source's calculation for COGS. Let's re-verify using the first method which includes direct expenses.

   Using the formula: Opening Stock + Net Purchases + Direct Expenses - Closing Stock

   $$COGS\; =\; 25,000\; +\; 10,40,000\; +\; 1,00,000\; -\; 30,000\; =\; 11,35,000$$

   The Cost of Goods Sold is Rs 11,35,000.

3. Gross Profit:

   Gross Profit is calculated by subtracting the Cost of Goods Sold from Net Sales.

   First, let's calculate Net Sales:

   $$Net\; Sales\; =\; Cash\; Sales\; +\; Credit\; Sales\; -\; Sales\; Return$$

   $$Net\; Sales\; =\; 4,00,000\; +\; 12,00,000\; -\; 50,000$$

   $$Net\; Sales\; =\; 16,00,000\; -\; 50,000$$

   $$Net\; Sales\; =\; 15,50,000$$

   Now, calculate Gross Profit:

   $$Gross\; Profit\; =\; Net\; Sales\; -\; Cost\; of\; Goods\; Sold$$

   $$Gross\; Profit\; =\; 15,50,000\; -\; 11,35,000$$

   $$Gross\; Profit\; =\; 4,15,000$$

   The Gross Profit is Rs 4,15,000.