| Le | |
| Rent | 25,000 |
| sales | 850,000 |
| return outwards | 15,000 |
| purchase | 400,000 |
| returns inwards | 25,000 |
| Insurance | 45,000 |
| fixtures and fittings | 15,000 |
| wages and salaries | 112,000 |
| Transport | 6,000 |
From the above information calculate the: (a) turnover (b) cost of goods sold (c) gross profit (d) Rate of stock turn
Explanation
(a) Turnover = sales - Returns inwards = Le850,000 - Le25,000 = Le825,000
(b) cost of goods sold = opening stock + purchase - Return Outwards - closing stock Le Le opening stock 0 purchase 400,000 less returns outwards 15,000 385,000 Less closing stock 0 cost of goods sold 385,000
(c) Gross profit = Turnover - cost of goods sold = Le 825,000 - Le 385,000 = Le 440,000
(d) Net profit = gross profit - total expenses gross profit Le440,000 less total expenses 45,000 Insurance 112,000 wages and salaries 6,000 transport 25,000 188,000 252,000
(e) Rate of stock turnover = cost of goods sold Average stock Average stock = opening stock + closing stock 2 = 0 + 0 2 = Le 0 Rate of stock of turnover = Le 385,000 0 = 0 Times