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Opening payables balance = $4,000
Closing payables balance = $6,000
Payments to credit suppliers = $12,000
Cash purchases = $1,000
What is the total purchases figure?
A! 7,000
B! 10,000
C! 11,000
D! 6,000Please do not simply set me a question.
Presumably whatever book you found this question in also has the answer.Say which part of the answer is causing a problem and I will try and help.
(Prepare a payables account – purchases on credit will be the missing figure. Add to this the cash purchases and you will then have the total purchases.)
I am really sorry to set you a question. My working on this question is following:
P.C.A
payment: 12000 b/d: 4000
c/d – 6000 credit purchase: x (assume)
18000(sum) x+4000
so, x= 14000. this x represents credit purchase. so, total purchase is(14000+1000)= 15000.
BUT, the problem is there is no choice of 15000. rather the given ans is 7000. PLz explain me.Mahedi:
Your answer of 15,000 is correct. Assuming that you have typed out the question correctly, then there is a mistake in whatever book you are using.
Nasr Shahbaz:
You should watch the free lecture on mark-ups and margins!
A mark-up of 20% means that the profit is 20% of cost. A margin of 20% means that the profit is 20% of sales.In your example, the cost of sales is as you have typed and is therefore 85,300.
So the profit is 20% x 85,300 = 17,060.
Therefore the sales are 85,300 + 17,060 = 102,360.So the margin is 17060/102360 = 16.7%
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