Please help past papers
agatha
Registered Posts: 41 Regular contributor ⭐
Hi
I hope someone can help me with question 1.6 from past papers December 2005.
"On 31 October 2005, closing stock was valued at selling price at £22,750 excluding VAT. The markup on these goods is 40%. Calculate the closing stock figure for inclusing in the trial balance"
I do know that Mark up= GP/COS (Sales= 140%, COS= 100% and GP= 40%) but I cant get the answer right:crying: I checked at the back and all i am finding is 22,750/ 1.4= 16,250
I would be grateful for explanation
thanks
A
I hope someone can help me with question 1.6 from past papers December 2005.
"On 31 October 2005, closing stock was valued at selling price at £22,750 excluding VAT. The markup on these goods is 40%. Calculate the closing stock figure for inclusing in the trial balance"
I do know that Mark up= GP/COS (Sales= 140%, COS= 100% and GP= 40%) but I cant get the answer right:crying: I checked at the back and all i am finding is 22,750/ 1.4= 16,250
I would be grateful for explanation
thanks
A
0
Comments

Hi
I make it 22,750/100 then times by 40 to give the mark up of 9100. Then you subtract this from the 22,750 to make a closing stock of 13,650.
Does that sound right? I haven't got back as far as 2005 papers yet.0 
You are on the right lines if mark up on cost is 40% then the selling price is 140% as you said.
100% is the cost, so divide the selling price 22750 by 140 to get 1% which is 162.5.
To get 100% you then multiply that by 100 which is 16,250.
Essentially its the same calculation just explained a different way.0 
the right anwser is 16,250 but i dont understand why?
i didnt go as far as 2005 i have started with 2005:laugh: thats the first paper i found after coming from work :001_smile:0 
Do you understand it after my explanation? I'm not sure if our replies crossed in posting!0

you opened my eyes! i didnt read the question properly, havent clicked that 22,750 IS a SELLING PRICE, thanks a lot, now it looks so easy
A0 
:001_smile:they did cross in posting0

Hi
I am working in reverse from 2007, typical me!
The closing stock figure must be the lower of cost and net realisable value that is why the closing stock figure is at cost (selling price minus the 40% mark up)0
Categories
 All Categories
 1.2K Books to buy and sell
 2.3K General discussion
 18.9K For AAT students
 265 NEW! Qualifications 2022
 147 General Qualifications 2022 discussion
 9 AAT Level 2 Certificate in Accounting
 42 AAT Level 3 Diploma in Accounting
 64 AAT Level 4 Diploma in Professional Accounting
 8.9K For accounting professionals
 23 coronavirus (Covid19)
 274 VAT
 92 Software
 274 Tax
 138 Bookkeeping
 7.3K General accounting discussion
 193 AAT member discussion
 3.8K For everyone
 38 AAT news and announcements
 352 Feedback for AAT
 2.8K Chat and offtopic discussion
 590 Job postings
 17 Who can benefit from AAT?
 36 Where can AAT take me?
 44 Getting started with AAT
 26 Finding an AAT training provider
 48 Distance learning and other ways to study AAT
 25 Apprenticeships
 65 AAT membership