A Accounting

How to calculate sales (video below)

Selena fixes prices to make a standard gross profit percentage on sales of 30%.

The following information for the year ended 31 January 20X5 is available to compute her sales total for the year.

$
Inventory: 1 February 20X4 60,750
31 January 20X5 65,425
Purchases 148,850
Purchases returns 10,300

What is the sales figure for the year ended 31 January 20X5?

Answer

Cost of sales
$
Opening inventory 60,750
Purchases 148,850
Less: purchases returns (10,300)
199,300
Less: closing inventory (65,425)
133,875

Margin = (sale –cost)/sale = 30%

Sales = 133,875 x 100/70 = $191,250


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