Use the information below to answer questions 23 and 24. ............................31/12/07.......31/12/08 Stocks........................₦4 200.........₦3...
Question 1 Report
Use the information below to answer questions 23 and 24.
............................31/12/07.......31/12/08
Stocks........................₦4 200.........₦3 900
Rates in advance..............₦1 000.........₦1 500
Accrued wages.................₦1 150.........₦1 350
Cost of goods sold was valued at ₦6 000.
Cash paid for rates and wages during the year was ₦1 300 and ₦2 200 respectively.
What is the value of purchases for the year 2008?
Answer Details
To find the value of purchases, we need to calculate the change in stocks from 2007 to 2008 and add it to the cost of goods sold.
The change in stocks is calculated as:
Stocks (31/12/08) - Stocks (31/12/07) = ₦3,900 - ₦4,200 = -₦300
Since there is a decrease in stocks, it means that goods were sold from stocks. Therefore, the value of purchases for the year 2008 is:
Cost of goods sold + change in stocks = ₦6,000 - ₦300 = ₦5,700
Therefore, the answer is ₦5,700.
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