A Accounting

Sale​ and gross profit percentage (Video below)

A sole trader who does not keep full accounting records wishes to calculate her sales revenue for the year.

The information available is:

1.Opening inventory   $4,250

2.Closing inventory   $6,000

3.Purchases   $22,750

4.Standard gross profit percentage on sales revenue   40%

Which of the following is the sales figure for the year calculated from these figures ?

Answer

Cost of sales= opening inventory + purchase – closing inventory

= $4,250 + $22,750 – $6,000 = $21,000

Sales   100%

Cost of sales   60%

Gross profit   40%

Margin = (sale –cost)/sale = 40%

Sales = $21,000 /60% = $35,000


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