FAPR question

Hi I came across the following question and couldn't quite get my head round how to work it out. (have made up the numbers as cant remember the exact)
I had the total purchases e.g. £114000
Mark up is always 40%
Vat registered, all sales and purchases on credit
The inventory decreased by 2700 during the year
Calculate cost of sales.

Any help would be greatly appreciated :)

Comments

  • JC101JC101 Posts: 22AAT Student
    Is it...
    Costs = Opening Inventory + Purchases - Closing Inventory
    Costs = 12,700 + 114,000 - 10,000
    (I've used 12,700 and 10,000 just to represent the 2,700 decrease in inventory)
    Costs = £116,700
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