A trader purchased goods worth ₹2,50,000 and paid ₹15,000 as carriage on those
A trader purchased goods worth ₹2,50,000 and paid ₹15,000 as carriage on those
goods. He sold the goods for ₹3,75,000 and paid ₹10,000 towards carriage on them. He
also incurred ₹10,000 towards other general expenditure. What shall be the gross profit
of the trader?
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Correct answer: (A) ₹1,10,000
Explanation
Gross profit = sales - (purchases + direct expenses) = 3,75,000 - (2,50,000 + 15,000) = 1,10,000. Carriage on sales and general expenses are indirect expenses charged to the P&L account, not the trading account.