Hello, can u help me explain this exercise ?
Ann's cash at bank account for the month of May shows receipts from customers of £4,370 and payments to suppliers of goods for resale of £2,850.
On 1 May and 31 May Ann owed suppliers £460 and £570 respectively and at 31 May one customer had not paid her invoice of £320.
Ann had goods on hand at 1 May and 31 May which had cost him £650 and £710 respectively.
Ann's gross profit for the month of May is
A £1,150
B. £1,790
C. £2,010
D. £1,370
Thank u !
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trade receivables & trade payables
3y ago#1The total sales during the month are 4,370 + 320 = 4,690.
The total purchases during the month are 2,850 - 460 + 570 = 2,960.
Therefore the cost of goods sold is 650 + 2,960 - 710 = 2,900
Therefore the profit for the month is 4,690 - 2,900 = 1,790
Have you watched my free lectures on this? :-)
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