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Hello sir! Can you please help me with this question?
Catt sells goods at a margin of 50%. During the year to 31 March 20X3 the business made purchases totalling $134,025 and sales totalling $240,000. Inventories in hand at 31 March 20X3, valued at cost, was $11,385 higher than the corresponding figure at 1 April 20X2.
What was the cost of the goods Catt had drawn out?A $2,640
B $14,590
C $25,410
D $37,360The cost of sales was 50% x 240,000 = $120,000.
Of the purchases figure of 134,025, 11,385 went to increasing the inventory, which leaves $122,640.
Therefore the owner must have taken out 122,640 – 120,000 = $2,640.
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