Lennox,a sole tradee, has calculated that his cost of sales for the year is $144,000.
His sales figure for the year includes an amount of $2016 being amount paid by Lennox himself into the business bank account for good withdrawn for private use.The figure of $2016 was calculated by adding a mark-up of 12% to the cost of the goods.His gross profit percentage on all other goods sold was 20% of sales.What is the total figure of sales for the year?
Sale on him self: $2016
Cost of sale = $2012 / 112% = $1800
Other cost sale =
$144000 – $1800 = $142200
20% on sale= $142200 / 80% = $177750
Toral sale figure =
$2016 + $177750 = $179766
I think you need to stop at $177,750.
These are the third-party sales. The ‘sales’ of $2106 are NOT proper sales. The double entry to handle those shold have been:
Cr Purchases 1,800
Dr Drawings 1,800
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