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RECEIVABLE AND PAYABLE LEDGER

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › RECEIVABLE AND PAYABLE LEDGER

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • June 19, 2021 at 2:42 pm #625823
    KUMAR2810
    Participant
    • Topics: 17
    • Replies: 2
    • ☆

    Catt sells goods at a margin of 50%. During the year to 31 March 20X3 the business made purchases
    totalling $134,025 and sales totalling $240,000. Inventories in hand at 31 March 20X3, valued at
    cost, was $11,385 higher than the corresponding figure at 1 April 20X2.
    What was the cost of the goods Catt had drawn out?

    A $2,640
    B $14,590
    C $25,410
    D $37,360

    IN the solution they have shown COS as 120000

    DOUBTS- shouln’t the COS be since it is on 50% margin 240000/150*100 = 160000 ??

    June 19, 2021 at 4:00 pm #625840
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51576
    • ☆☆☆☆☆

    Unless specifically told differently, a margin is a % of sales (and a mark-up is a % of cost).

    Therefore the cost of sales is 40% x $240,000 = $120,000.

    I do suggest that you watch my free lectures on mark-ups and margins. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.

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