Unit 5 Past Exam Paper

jewels.p

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:

Esme

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.p

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.p

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?

Toffeemadblue

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

rachy1975

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:

Esme

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.p

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.p

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:

ema192

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