The following information was extracted from the books of XYZ Ventures as at 31st June 2023.
Opening stock 200,000
Closing stock 100,000
Salaries and wages 120,000
Purchases 900,000
Shop rent 150,000
30% profit was made on cost of goods sold.
You are required to calculate:
(a) cost of goods sold
(b)gross profit
(e)total sales
(d) net profit
(e) rate of turnover.
XYZ Ventures
(a) Computation of cost of goods sold
Opening stock 200,000
Purchases 900.000
Cost of goods available for sales = 1,100,000
Less closing stack (100.000)
Cost of goods sold 1.000,000
(b) Computation of gross profits
Gross profit = 30% of cost of goods sold
= 30% * Le 1,000,000
= Le 300,000
(c) Total sales Sales = Cost of goods sold +Gross profits
= Le 1,000,000 + Le 300,000
= Le 1,300,000
(d) Net profit:
Le Le
Gross profits 300,000
Loss expenses
Salaries and wages 12,000
Shop rent 150,000 (270,000)
net profit (30,000)
(e) Rate turnover
= \(\frac{COST OF GOODS SOLD}{AVERAGE STOCK}\)
Average stock
= \(\frac{opening stock + closing stock}{2}\)
= \(\frac{Le200,000+100,000}{2}\)
=Le 150,000
Rate of turnover
= \(\frac{Le 1,000,00}{Le 150,000}\)
= 6.67 times
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