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Unit 5 Past Exam Paper

jewels.pjewels.p Font Of All KnowledgeRegistered Posts: 1,774
Can anyone help with this question?

On 30 September 2008, closing stock was recorded at its selling price of £19,800 exc. VAT. The mark-up on the cost of these goods is 65%

Calculate the closing stock.

My answer was £19,800 less the 65% mark-up which came to £6930

The correct answer is £12000 :huh:

Look like I need to study Stock a lot more than I have!:thumbdown:

P.S It is from Decembers Exam Paper which I thought I would have a look at but only at question 1.5 and stuck already not a good sign:crying:

Comments

  • EsmeEsme Experienced Mentor Registered Posts: 711
    19,800/ 1.65 = 12,000

    the mark up on 12,000 was 7,800 which is 65% therefore the actual value of the stock which is lowest of cost or net realisable value is 12,000.
  • jewels.pjewels.p Font Of All Knowledge Registered Posts: 1,774
    Esme wrote: »
    19,800/ 1.65 = 12,000

    the mark up on 12,000 was 7,800 which is 65% therefore the actual value of the stock which is lowest of cost or net realisable value is 12,000.

    Forgive me for sounding thick but where do you get the £12000 from?:blushing:
  • jewels.pjewels.p Font Of All Knowledge Registered Posts: 1,774
    jewels.p wrote: »
    Forgive me for sounding thick but where do you get the £12000 from?:blushing:

    I mean why are you dividing it by 1.65?
  • ToffeemadblueToffeemadblue Well-Known Registered Posts: 102
    Hi Jewels.p
    The way to work this out is to take the Closing stock at Sales value
    £19,800
    and divide by the mark up of 65% i.e 1.65 and then you arrive at the cost price of the stock which is as the answer says £12,000
  • rachy1975rachy1975 Trusted Regular Registered Posts: 366
    jewels.p wrote: »
    I mean why are you dividing it by 1.65?

    hi dont know if this will help but i got a little confused in class myself on mon with this......my tutor explained it as so...
    if you ever get stuck take it back to 1%
    19800 is 165% so divide it into 165 to get your 1%
    1% = 120
    multiply by 100 to get price before it was marked up which £1200
    or by 65 to get the 65% number it was marked up by...7800

    :001_smile:
  • EsmeEsme Experienced Mentor Registered Posts: 711
    jewels.p wrote: »
    I mean why are you dividing it by 1.65?

    I worked it out in the exam by using the same principle as for finding net from gross for Vat. I would divide by 1.175 so instead I divided by 1.65 to find the cost before the 65% had been added.
  • jewels.pjewels.p Font Of All Knowledge Registered Posts: 1,774
    Esme wrote: »
    I worked it out in the exam by using the same principle as for finding net from gross for Vat. I would divide by 1.175 so instead I divided by 1.65 to find the cost before the 65% had been added.

    Thats prob why I am getting confused. When I am calculating VAT I work it out by dividing it by 47 then multiply by 7 then deducting VAT from gross cause thats the way I have always done it at work. I dont do the decimal calculations.
  • jewels.pjewels.p Font Of All Knowledge Registered Posts: 1,774
    rachy1975 wrote: »
    hi dont know if this will help but i got a little confused in class myself on mon with this......my tutor explained it as so...
    if you ever get stuck take it back to 1%
    19800 is 165% so divide it into 165 to get your 1%
    1% = 120
    multiply by 100 to get price before it was marked up which £1200
    or by 65 to get the 65% number it was marked up by...7800

    :001_smile:


    Thanks for that. I am gonna print that off and keep it in my folder for future reference. :thumbup1:
  • ema192ema192 Well-Known Registered Posts: 107
    I kinda find it easier to work out if i use a method :

    (19800/165 = 120)

    165% = 19800

    65% = 7800 ( 120 x 65)

    100% = 12000 (120 x 100)


    Just a suggestion i am doing the past exam papers myself at the moment. :-s
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