Stock workings ?

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:31AM in AAT student discussion
I put this thick moment down to stress ..

I have a question in a past paper and I cant understand it . Its the Sarah Glass : KW Enterprises paper Question 1.4

The rest of the questions I understand fine, but just this is doing my head in not being able to understand it !

Calculate the closing stock (Sales has a Margin of 20%)

The answer has it set out like this

Sales 1 021 500
Opening Stock 43 160
Purchases 807 300
Closing Stock (33 260)
(Balancing Figure)
817 200

Gross Profit is 204 300

I cant understand where the closing stock figure has come in ? Is there a more basic way someone could explain it to me so I can understand ?

Thanks :)

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Stock workings ?

    1,021,500 margin 20% means 1,021,500/100*20=margin
    1,021,500-margin=total sales

    sales=1,021,500 (sales-cost of sales= gross profit) so
    -(Opening Stock 43,160, +Purchases 807,300-Closing Stock 33,260)=gross profit
    (Balancing Figure)
    817 200

    so sales=1,021,500-cost of sales= gross profit
    cost of sales =(43160+807300-33260=cost of sales)
    gross profit=...

    thats my take anyway let me know if it helps i wish i could do it for you but im actually revising at the moment so you will have to calcualte it yourself
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Stock workings ?

    Hi, I will try to help and hope that I don't complicate things for you....

    First you need to calculate THE COST OF SALES

    You have been told that the sales margin is 20%
    As the margin is on sales, then sales is 100%
    and the cost of sales will be 80%

    To calculate cost of sales, take the percentage of the figure you are looking for (ie 80%) and divide by the percentage figure you have (ie 100%) then multiply this by the actual figure you have (£1 021 500).

    80/100 x 1021500 = 817200 (COST OF SALES FIGURE).

    Cost of sales is made up of the following figures:

    Opening stock 43 160
    add purchases 807 300
    less closing stock ???????
    COST OF SALES 817 200

    Then calculate the missing figure

    43160 + 807300 = 850460
    850460 - ????? = 817200
    Missing figure is 33260 (850460 - 33260 = 817200)

    Hope this helps and good luck

    Carole

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Stock workings ?

    Thanks guys :)

    That clears it up, I just hope I can remember it all tmw afternoon ! I'm stressing about one exam, so my heart goes out to the others who have done 2 or 3 exams this week !

    K
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Stock workings ?

    Good luck with exam tomorrow.

    I'm sitting the FRA tomorrow, so I'm busy revising but I'm finding that I'm making silly mistakes now. Just hope it all fits in place tomorrow.

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