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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.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 inventoryNow, armed with that, you should be able to answer these two little problems
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.
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?
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