Ap2

Nickynoo

Ok so given a test paper I want to know what and how anyone manges to get the answer??

Sales were 95,200 in the year, all at a mark-up of 60%. The Openeing Stock was 22,560 and the closing stock was 18,420.

I have to Calculate the purchases for the year with the above information?? I have the answer but am unable to reach the same conclusion?

Thank you

billdoor

I believe this is correct:

Sales are 95200 with a mark-up of 60%.

95200 is equal to 160%

Take the Sales figure of 95200/160 x 100 = 59500

So Purchases are 59500.

Plus Opening Inventory of 22560.
= 82060

Less Closing Inventory of 18420.
= 63640

So Purchases for the year = 63640

Does this fit with the answer you have?

angmc

Cost of Sales 95200/160 x 100) = 59500 + closing inventory 18420 - opening inventory 22560 = Purchases 55360

and to do a double check... opening inventory (22560) + purchases (55360) - closing inventory (18420) = cost of sales (59500)