Use the following information to answer the given question \(\begin{array}{c|c} & ₦ \\ \hline \text{Opening stock} & 1,800\\ \text{Closing stock} & 1,350 \\...
Question 1 Report
Use the following information to answer the given question
\(\begin{array}{c|c} & ₦ \\ \hline \text{Opening stock} & 1,800\\ \text{Closing stock} & 1,350 \\ \text{Creditors- 1/01/2004} & 1,274 \\ \text{Creditors- 31/12/2004} & 1,140\\ \text{Cash paid to creditors} & 6,900\\ \text{Debtors 1/01/2004} & 465\\ \text{Cash received from debtors} & 11,130 \\ \text{Debtors 31/12/2004} & 300\end{array}\)
Cost of sales for the year was
\(\begin{array}{c|c} & ₦ \\ \hline \text{Opening stock} & 1,800\\ \text{Closing stock} & 1,350 \\ \text{Creditors- 1/01/2004} & 1,274 \\ \text{Creditors- 31/12/2004} & 1,140\\ \text{Cash paid to creditors} & 6,900\\ \text{Debtors 1/01/2004} & 465\\ \text{Cash received from debtors} & 11,130 \\ \text{Debtors 31/12/2004} & 300\end{array}\)
Cost of sales for the year was
Answer Details
To calculate the cost of sales, we need to use the formula:
Cost of sales = Opening stock + Purchases - Closing stock
Here, we are not given the total purchases, but we can calculate it using the information given about creditors and cash paid to creditors:
Purchases = Creditors at the end + Cash paid to creditors - Creditors at the beginning
Purchases = ₦1,140 + ₦6,900 - ₦1,274 = ₦6,766
Now, we can calculate the cost of sales:
Cost of sales = Opening stock + Purchases - Closing stock
Cost of sales = ₦1,800 + ₦6,766 - ₦1,350 = ₦7,216
Therefore, the cost of sales for the year was ₦7,216. The closest option to this answer is option C, which is ₦7,215.
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