Maina Merchants Trading and Profit and Loss Account (Extract) ? ? ? Stock (1/1/2010) 80,000 Sales 300,000 Purchases 90,000 Less Cost of goods available for ...
Question 1 Report
Maina Merchants Trading and Profit and Loss Account (Extract)
| ? | ? | ? | ||
| Stock (1/1/2010) | 80,000 | Sales | 300,000 | |
| Purchases | 90,000 | Less | ||
| Cost of goods available for sale | 170,000 | Returns inwards | 30,000 | |
| Stock (31/12/2010) | ? | 270,000 | ||
| Cost of goods sold | ? | |||
| Gross profit | 150,000 | |||
| 270,000 | 270,000 |
Determine the closing stock.
Answer Details
To determine the closing stock, we need to use the formula: Closing Stock = Cost of Goods Available for Sale - Cost of Goods Sold. From the given information, we know that the cost of goods available for sale is ₦170,000 and the gross profit is ₦150,000. Therefore, the cost of goods sold is ₦120,000 (₦270,000 - ₦150,000). Using the formula, we can calculate the closing stock as follows: Closing Stock = ₦170,000 - ₦120,000 = ₦50,000. Therefore, the closing stock for Maina Merchants Trading is ₦50,000.
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