FSLC Assessment 2

sophie_612

Hi,

Please can someone help me as to how they got the highlighted answer.

Thanks
Sophie

Clintm15

It goes like this:

Sales: 156580

Cost of Goods Sold:
opening inventory 2156 + purchases 130980 - (closing stock 3142 - inventory write down to NRV 258) - tax paid in error 3000 - dividend posted in error 2000 = 125252

Gross profit:
Sales 156580 - COGS 125252 = 31328

Overheads:
distribution costs 1987 + admin expenses 4358 + legal provision 1000 = 7345

EBIT:
Gross profit 31328 - Overheads 7345 = 23983

Interest and Tax:
interest 35 + tax 4200 - tax overprovision 150 = 4085

Net profit:
EBIT 23983 - interest and tax 4085 = 19898