WAEC - Accounts Principles Of Accounts (2023 - No. 14)
Use the following information to answer the question
The following transactions relate to Osei Enterprises for the year ended 31st December 2020.
| D | |
|
Purchases |
160,000 |
| Returns outwards | 880 |
| Carriage inwards | 740 |
| Returns inwards | 620 |
| Sales | 195,000 |
| Salaries | 27,600 |
| Closing stock | 14,100 |
The gross profit
D 39,360
D 38, 620
D 36,360
D 39,220
Explanation
The given information states:
Sales: D195,000
Purchases: D160,000
Returns outwards: D880
Carriage inwards: D740
Returns inwards: D620
To calculate the cost of goods sold, we need to subtract the returns inwards and carriage inwards from the purchases:
Cost of Goods Sold = Purchases - Returns Inwards - Carriage Inwards
Cost of Goods Sold = D160,000 - D620 - D740
Cost of Goods Sold = D158,640
Gross Profit = Net Sales - Cost of Goods Sold
Gross Profit = D195,000 - D158,640
Gross Profit = D36,360
Sales: D195,000
Purchases: D160,000
Returns outwards: D880
Carriage inwards: D740
Returns inwards: D620
To calculate the cost of goods sold, we need to subtract the returns inwards and carriage inwards from the purchases:
Cost of Goods Sold = Purchases - Returns Inwards - Carriage Inwards
Cost of Goods Sold = D160,000 - D620 - D740
Cost of Goods Sold = D158,640
Gross Profit = Net Sales - Cost of Goods Sold
Gross Profit = D195,000 - D158,640
Gross Profit = D36,360
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