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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 towa…

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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?

A₹1,10,000
B₹1,00,000
C₹1,25,000
D₹90,000

Correct answer: A

Explanation

Gross profit = Sales – (Purchases + Carriage inwards) = 3,75,000 – (2,50,000 + 15,000) = ₹1,10,000. Carriage outwards and general expenses are indirect expenses and are charged below gross profit.

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