Le Rent 25,000 sales 850,000 return outwards 15,000 purchase 400,000 returns inwards 25,000 Insurance 45,000 fixtures and fittings 15,000 wages and salaries...
Question 1 Report
| Le | |
| Rent | 25,000 |
| sales | 850,000 |
| return outwards | 15,000 |
| purchase | 400,000 |
| returns inwards | 25,000 |
| Insurance | 45,000 |
| fixtures and fittings | 15,000 |
| wages and salaries | 112,000 |
| Transport | 6,000 |
From the above information calculate the: (a) turnover (b) cost of goods sold (c) gross profit (d) Rate of stock turn
Answer Details
Trading information (in Le)
| Item | Le |
|---|---|
| Sales | 850,000 |
| Returns inwards | 25,000 |
| Purchases | 400,000 |
| Returns outwards | 15,000 |
| Rent | 25,000 |
| Insurance | 45,000 |
| Wages and salaries | 112,000 |
| Transport | 6,000 |
(a) Turnover = Sales - Returns inwards = 850,000 - 25,000 = Le825,000
(b) Cost of goods sold = Opening stock + Purchases - Returns outwards - Closing stock. With opening and closing stock both nil:
= 0 + 400,000 - 15,000 - 0 = Le385,000
(c) Gross profit = Turnover - Cost of goods sold = 825,000 - 385,000 = Le440,000
(d) Rate of stock turn
\[ \text{Rate of stock turn} = \frac{\text{Cost of goods sold}}{\text{Average stock}}, \qquad \text{Average stock} = \frac{\text{Opening stock} + \text{Closing stock}}{2} \]
Since no opening or closing stock is given, average stock = \( \dfrac{0 + 0}{2} = \text{Le}0 \), so the rate of stock turn is indeterminate from the data provided (there is no stock held to turn over).
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