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Sir under the mini exercises for Revenue (in the course notes) kindly indicate how the answers are arrived at for q1 and 3.
Thanks a muchHi Susan
We know the revenue figure in both cases and, by applying the mark-up routine to the revenue figure we can arrive at gross profit
And if we know the figures for revenue and for gross profit, then we can find cost of sales
And you’ll remember from your F3 days that cost of sales is calculated as “opening inventory + purchases – closing inventory = cost of sales”
In both examples, we either know or can easily calculate 3 of those 4 figures
In both cases we know the figure for opening inventory. In 1 question we are told the purchases figure so we can therefore find the closing inventory amount whereas in the other example we can calculate the closing inventory amount and therefore we can find the figure for purchases
OK?
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