The following balances were extracted from the books of Onuoha, a trader on 31st December 2005
| Audit fee | 12000 |
| General expenses | 30000 |
| Purchases | 70000 |
| Commission paid | 30000 |
| Stock (1 - 01 - 2005) | 10000 |
| Stock ( 31 - 12 - 2005) | 15000 |
| Sales | 120000 |
The gross profit is
Calculate the Cost of Goods Sold (COGS): COGS = Opening Stock (1-01-2005) + Purchases - Closing Stock (31-12-2005) COGS = #10,000 + #70,000 - #15,000 COGS = #65,000
Calculate the Gross Profit: Gross Profit = Sales - COGS Gross Profit = #120,000 - #65,000 Gross Profit = #55,000
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