FSTP Practice Assessment 2

philreddy1985

Hello people,

I wonder if someone could please help explain something for me.

I am sitting my FSTP exam next week and have been practicing exams for a week or so. I can now breeze through Practice Assessment 1 without any problems at all but I am having some difficulty working out question 1.2 b) on Practice Assessment 2.

The question is:-

Sales for year = £66,000
Purchases for year = £59,120
Mark up of 20% on cost

Calculate the value of Cost of goods sold.

The equation I have from my notes is:- Cogs = Opening Inv + Purchases - Closing Inv

But at the stage of reaching question 1.2 b) the value of closing inv is unknown and to calculate the value of closing inv the value of Cogs must have been calculated first.

I know from the answers that Cogs is £55,000 but, I would appreciate if someone could please demonstrate to me a simple way of reaching this figure.

Either I am missing something entirely or I am over-thinking this.

Any answers or comments will be greatly appreciated.

Many thanks

philreddy1985

Mickdundee you legend!!!

philreddy1985

I cant believe I was missing that!! Thank you.

If mark up was 10% would the equation be £66,000 x 100/110?

philreddy1985

Thank you so much for helping explain this!