Sale and gross profit percentage (Video below)
A sole trader who does not keep full accounting records wishes to calculate her sales revenue for the year.
The information available is:
1.Opening inventory $4,250
2.Closing inventory $6,000
3.Purchases $22,750
4.Standard gross profit percentage on sales revenue 40%
Which of the following is the sales figure for the year calculated from these figures ?
Answer
Cost of sales= opening inventory + purchase – closing inventory
= $4,250 + $22,750 – $6,000 = $21,000
Sales 100%
Cost of sales 60%
Gross profit 40%
Margin = (sale –cost)/sale = 40%
Sales = $21,000 /60% = $35,000
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