Cost of Goods Sold = Opening Stock+Purchases Direct Expenses–Closing Stock

Cost of Goods Sold = Opening Stock+Purchases Direct Expenses–Closing Stock Look at Illustration and see how it has been computed. Illustration Compute cost of goods sold for the year with the help of the following information and prepare trading account , , , , , , Stock (Apr. , ) , , Stock (March , ) , , Freight inwards , , Solution Computation of Cost of Goods Sold , , Add Purchases , , Direct expenses : Freight inwards , , , , , , Less Closing stock ( , , ) Cost of goods sold , , Trading Account for the year ended March , Expenses/Losses Revenues/Gains , , , , , , Closing stock , , Freight inwards , , , , Gross profit , , , , , , Illustration From the following balances obtained from the few accounts of Mr. H. Balaram. Prepare the Trading and Profit and Loss Account. Stock on Apr. , , Purchases for the year , Rent , Sales for the year , Discount allowed Purchase expenses , Commission paid , Salaries and wages , Sales expenses Advertisement Repairs Closing stock on March , is Rs. , Books of H. Balaram Trading Account for the year ended March , Expenses/Losses Revenues/Gains , , Closing stock Purchase expenses , Gross profit c/d , , , Salaries and Wages , Gross profit b/d , Rent , Advertisement Commission , Discount allowed , Sales expenses Repairs Net profit , (transferred to capital account) , ,