The following information relates to Raisa's grocery store as of 31st December 2018. Stock -1st January 2018 20,000 Purchases 150,000 Sales 230,000 Carriage...

Question 1 Report

The following information relates to Raisa's grocery store as of 31st December 2018.

Stock -1st January 2018	20,000
Purchases	150,000
Sales	230,000
Carriage inwards	4,000
Rent received	80,000
Salaries	29,000
Stock -31st December 2018

You are required to calculate:
(a) cost of goods sold
(b) gross profit
(c) net profit
(d) percentage of gross profit

Answer

opening account ------------- 20,000	sales ------------------230,000
Add purchases -------------- 150,000
170,000
Add carriage inwards------- 4,000
cost of goods available-----174,000
Less closing stock----------- 35,000
cost of goods sold(wk1)---- 139,000
Gross profit(wk2)------------- 91,000
230,000	230,000
EXPENDITURE	Gross profit b/d--------- 91,000
Salaries----------------------- 29,000
Net profit c/d(wk3)--------- 62,000
91,000	91,000
	Net profit b/d ----------- 62,000

Workings:

i. Cost of goods sold = 139,000

ii. Gross profit = 91,000

iii. Net profit 62,000

iv. percentage of gross profit = $\frac{gross profit}{s a l e s}$ x 100%

= $\frac{91, 000}{230, 000} \times \frac{100}{1}$

= 39.57%

Answer Details

opening account ------------- 20,000	sales ------------------230,000
Add purchases -------------- 150,000
170,000
Add carriage inwards------- 4,000
cost of goods available-----174,000
Less closing stock----------- 35,000
cost of goods sold(wk1)---- 139,000
Gross profit(wk2)------------- 91,000
230,000	230,000
EXPENDITURE	Gross profit b/d--------- 91,000
Salaries----------------------- 29,000
Net profit c/d(wk3)--------- 62,000
91,000	91,000
	Net profit b/d ----------- 62,000

Workings:

i. Cost of goods sold = 139,000

ii. Gross profit = 91,000

iii. Net profit 62,000

iv. percentage of gross profit = $\frac{gross profit}{s a l e s}$ x 100%

= $\frac{91, 000}{230, 000} \times \frac{100}{1}$

= 39.57%

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