# Stock 1/1/09 2200 Purchases 18000 Sales 27000 Salaries 1500 Rejection in doubtful debts 500 Office expenses 1100 Other expenses 1300 Stock 31/12/09 1000 T...
Question 1 Report
| # | |
Stock 1/1/09 |
2200 |
Purchases |
18000 |
Sales |
27000 |
Salaries |
1500 |
Rejection in doubtful debts |
500 |
Office expenses |
1100 |
Other expenses |
1300 |
Stock 31/12/09 |
1000 |
The net profit is
Answer Details
To calculate the net profit, we need to determine the Gross Profit first and then subtract the expenses from it. Follow these steps:
1. Calculate Cost of Goods Sold (COGS):
- Opening Stock: #2200
- Add Purchases: #18000
- Less Closing Stock: #1000
COGS = 2200 + 18000 - 1000 = #19,200
2. Calculate Gross Profit:
- Sales: #27000
- Less COGS: #19200
Gross Profit = 27000 - 19200 = #7,800
3. Calculate Total Expenses:
- Salaries: #1500
- Rejection in doubtful debts: #500
- Office expenses: #1100
- Other expenses: #1300
Total Expenses = 1500 + 500 + 1100 + 1300 = #4,400
4. Calculate Net Profit:
- Net Profit = Gross Profit - Total Expenses
- Net Profit = 7800 - 4400
Net Profit = #3,400
Therefore, the net profit is #3,400.
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