# Missing Figures

Options
Registered Posts: 19
Has anyone got any tips for calculating missing figures and the use of mark up and margin?

Thanks

• Registered Posts: 24
Options
Any question specific? or just in general? Or use of mark-up and margin to calculate missing figures??

Here are a few basics (which you may already know) apologies if you do.

Learn your postings in control ledgers mainly for missing figures. Only ever 2 entries on the debit side of the SLCA: Bal b/d and SDB. Only ever 2 entries on the credit side of the PLCA: Bal b/d and PDB.

So for example. If it asks you to find the discounts allowed figure, you know it's definitely a credit figure in the SLCA you are looking for.

Learn the VAT control account too. Just follow the "PEARLS" principle (Purchases, Expenses, Assets Debit Revenue Liabilities Sales Credit)

Opening Inventory + Purchases- Closing Inventory = (COGS) Cost of Goods Sold. So if you are asked to find any of those, as long as you know that you should be fine

Mark up is always on the cost of goods sold (COGS). COGS represents 100%, and if the mark-up is 25% this represents the profit therefore sale price is 125%

Margin is always on the sale price. Sale Price represents 100%, if margin is 25% this again represents profit so COGS = 75%

Quick example:
• Sales for the year are £100,000
• Gross profit margin is 25%
• Opening Inventory is £10,000
• Closing inventory is £12,000

What are the purchases for the year??

Because it's profit margin, sales represents 100%, Margin is 25% Cost of Goods Sold = 75%

Remember the equation:

OI+purchases-CI=COGS

First calculate COGS. £100,000 x (100-25/100) = £75,000

Now we have £10,000 + ? - £12,000 = £75,000

So £75,000 +£12,000 =£87,000 - £10,000 = purchases of £77,000

Just to double check
Opening Inventory + Purchases - Closing Inventory = Cost of Goods Sold
£10,000 + £77,000 - £12,000 = £75,000

Hope this helps.