Question
The following information relates to questions 7-9 The following balances were extracted from the books of Peter Moses a sole trader on December 31, 2018; $ Sales 9,600,000 Return inwards 100,000 Return outwards 70,000 Carriage inwards 150,000 Purchases 3,820,000 Stock at 1.1.2018 1,500,000 Stock at 31.12.2018 2,000,000 What is the Cost of Sales? Question 7Answer a. 5,400,000 b. 3,400,000 c. 7,200,000 d. 8,400,000
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Answer to a math question The following information relates to questions 7-9 The following balances were extracted from the books of Peter Moses a sole trader on December 31, 2018; $ Sales 9,600,000 Return inwards 100,000 Return outwards 70,000 Carriage inwards 150,000 Purchases 3,820,000 Stock at 1.1.2018 1,500,000 Stock at 31.12.2018 2,000,000 What is the Cost of Sales? Question 7Answer a. 5,400,000 b. 3,400,000 c. 7,200,000 d. 8,400,000
Jayne
4.496 Answers
1. Calculate the Net Purchases:
\text{Net Purchases} = \text{Purchases} + \text{Carriage inwards} - \text{Return outwards}
\text{Net Purchases} = 3,820,000 + 150,000 - 70,000 = 3,900,000
2. Calculate the Cost of Goods Available for Sale:
\text{Cost of Goods Available for Sale} = \text{Opening stock} + \text{Net Purchases}
\text{Cost of Goods Available for Sale} = 1,500,000 + 3,900,000 = 5,400,000
3. Subtract Closing Stock to get Cost of Sales:
\text{Cost of Sales} = \text{Cost of Goods Available for Sale} - \text{Closing stock}
\text{Cost of Sales} = 5,400,000 - 2,000,000 = 3,400,000
The correct answer is:
b.
3,400,000
2. Calculate the Cost of Goods Available for Sale:
3. Subtract Closing Stock to get Cost of Sales:
The correct answer is:
b.
3,400,000
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