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all the sales made by a retailer are for cash and her sale prices are fixed by doubling cost.details recorded of her transactions for september 20006 as follows:
1 september inventories $40,000
30 september purchase for the months-$60,000
30 september cash banked for sales for month-$95,000
30 september inventories-$50,000
which two of the following conclusion could separately drawn from this information?
1)$5000 cash has been stolen from the sales revenue prior to banking.
2)Goods costing $5000 haven been stolen
3)Goods costing $2500 haven been stolen
4)Some goods costing $2500 had been sold at cost price.
A)1 and 2
B)1 and 3
C)2 and 4
D)3 and 4any one know how to do this questions?
Ignoring the possible problems (like the goods stolen), then the cost of goods sold is 40000+60000-50000 = $50,000.
The sales are $95,000.Obviously something is wrong because sales are not double the cost.
1) if cash of 5000 had been stolen then it means that actual sales were 95000 + 5000 = 100,000. This is double the cost and so this is a possible cause.
2) if goods costing 5000 have been stolen, then the cost of sales would be 50000 – 5000 = 45000. The sales of 95000 are not double the cost and so this is not a possible cause.
3) If goods costing 2500 have been stolen then costs of sales would be 50000 – 2500 = 47500. The sales of 95000 are then double to cost and so this is a possible cause.
4) if goods costing 2500 had been sold at cost price, then the rest (which cost 50000 – 2500 = 47500) will have been sold for 92500 (95000 – 2500). This is not double the cost and so this is not a possible reason.
So…the answer is (1) and (3) – B
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