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  • This topic has 4 replies, 2 voices, and was last updated 9 years ago by MikeLittle.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • October 6, 2015 at 9:59 pm #275264
    george99
    Member
    • Topics: 9
    • Replies: 14
    • ☆

    2 questions to ask.

    1st

    His rival down the road achieve a gross margin of 15% . His closing inventory was 30% higher than opening inventory. Sales in year were 450000 $ and purchase were 400000. What was the opening inventory.

    2nd

    The local supermarket sold $500000 worth of goods in January at a consistent mark up of 12.5% .Opening inventory was 20000$ and purchase in the month were $440000.
    How much was the closing inventory.

    October 6, 2015 at 10:00 pm #275265
    george99
    Member
    • Topics: 9
    • Replies: 14
    • ☆

    Please help me I am struggling with this two questions.

    October 7, 2015 at 8:35 am #275320
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23315
    • ☆☆☆☆☆

    George, go back to your early mathematics education and use some algebra. Here’s a clue …. let “X” be the value of the opening inventory

    For both questions, remind yourself of the way in which Cost of Sales is calculated …. never mind, I’ll remind you.

    It’s:

    Opening inventory plus
    Purchases less
    Closing inventory

    Now, armed with that, you should be able to answer these two little problems

    October 7, 2015 at 8:55 pm #275467
    george99
    Member
    • Topics: 9
    • Replies: 14
    • ☆

    Sorry to bother you again sir I can’t this question I have tried the whole day but no luck please help me iam stuck the whole day.

    October 8, 2015 at 8:07 am #275486
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23315
    • ☆☆☆☆☆

    I’ll do question 1 and then maybe you can try question 2 again

    Sales were 450,000 and gross profit percentage was 15%.

    So gross profit was 15% x 450,000 = 67,500

    Therefore cost of sales was 450,000 – 67,500 = 382,500

    Cost of sales is “opening inventory + purchases – closing inventory”

    Let opening inventory be “X”

    So X + 400,000 – 1.3X = 382,500

    So .3X = 17,500

    So X = 58,333

    Better?

  • Author
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