Gross Profit – Knowsia

FA – Nov 2024 – L1 – Q5a – Inventory Loss and Statement of Profit or Loss

Compute inventory loss due to fire and prepare a statement of profit or loss for a sole trader.

Question

Mawulolo Enterprise is a retail business that prepares its accounts on 31 March each year. The business maintains a standard gross profit margin of 30% on sales.

The following financial information was extracted from its records as at 31 March 2024:

Item	GH¢
Inventory at 1 April 2023	254,000
Operating Expenses	378,000
Finance Cost	58,000
Purchases	1,306,000
Sales	1,900,000
Inventory in good standing at 31 March 2024	192,000

On 31 March 2024, a fire outbreak in the warehouse destroyed some of the inventory records and goods.

The tax charge for the year is estimated at GH¢30,000.

Required:

i)Calculate the amount of inventory lost.

ii) Prepare the Statement of Profit or Loss for the year ended 31 March 2024

Answer

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Tags: Cost of Sales, Financial Adjustments, Fire Loss, Gross Profit, Inventory Valuation, Net Profit
Level: Level 1

Topic: Inventory
Series: Nov 2024

FR – May 2015 – L2 – SB – Q3 – Statement of Cash Flows (IAS 7)

Calculate and analyze financial ratios and prepare cash flows from operating activities for Galadanci Plc.

Question

(a) Galadanci Plc, a telecommunications company, has the following financial statements for the years ending 31 December 2013 and 2014. Using the statements below, calculate specific ratios and analyze Galadanci Plc’s performance:

Statements of Profit or Loss and Other Comprehensive Income for the year ended

	2014 (N’billion)	2013 (N’billion)
Revenue	2,430	1,638
Cost of Sales	(1,701)	(983)
Gross Profit	729	655
Administrative Costs	(311)	(180)
Distribution Costs	(207)	(117)
Finance Costs	(36)	(6)
Profit before Taxation	175	352
Income Tax Expense	(54)	(102)
Profit for the Year	121	250

Statements of Financial Position as at 31 December

Additional Information for 2014

Galadanci Plc acquired 60% of Papanga Plc’s shares to diversify into agriculture.
The company increased its mobile subscriber base, raising the average revenue per user.
No dividends were received from Papanga Plc, and the share value remained constant.

Required:

Calculate the following ratios for the year ended 31 December 2014, analyze Galadanci Plc’s performance, and comment on qualitative factors impacting the company:
- Gross Profit Percentage
- Return on Capital Employed (where capital employed = Total Assets – Current Liabilities)
- Net Profit (PBIT) Percentage
- Asset Turnover
- Gearing Ratio
- Debt/Equity Ratio (16 Marks)
Prepare Galadanci Plc’s Cash Flows from Operating Activities using the indirect method according to IAS 7. (4 Marks)

Answer

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Tags: Asset Turnover, Cash Flow Statement, Gearing Ratio, Gross Profit, Return on Capital Employed
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: MAY 2015

FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements

Identifying which element is not affected when the proprietor consumes goods.

Question

The value of goods taken by the proprietor of a firm for his consumption will affect all but ONE of the following:

A. Gross profit
B. Net profit
C. Inventory balance
D. Company’s capital
E. Inventory valuation.

Answer

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Tags: Gross Profit, Inventory Valuation, Net Profit
Level: Level 1

Topic: Elements of Financial Statements
Series: MAY 2012

FA – May 2014 – L1 – SA – Q11 – Financial Statements Preparation

Calculates the cost of sales from given gross profit and sales figures.

Question

Aye Limited has a gross profit of 11% and its sales are N150,000. What is the cost of sales?
A. N133,500
B. N142,500
C. N154,500
D. N160,000
E. N165,000

Answer

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Tags: Cost of Sales, Gross Profit, Income Statement
Level: Level 1

Topic: Financial Statements Preparation
Series: MAY 2014

FA – May 2022 – L1 – SA – Q16 – Financial Statements Preparation

Calculate the gross profit for the period using provided sales and cost of goods sold data.

Question

Calculate the gross profit for the period.

A. ₦535,650,000
B. ₦543,450,000
C. ₦637,950,000
D. ₦647,600,000
E. ₦699,000,000

Answer

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Tags: Financial Reporting, Gross Profit, Inventory
Level: Level 1

Topic: Financial Statements Preparation
Series: MAY 2022

FA – May 2021 – L1 – SA – Q14 – Financial Statements Preparation

Calculate gross profit using opening and closing inventory and purchases.

Question

The following information relates to Owuro Enterprises:

Item	N
Opening inventory	124,000
Closing inventory	96,000
Purchases	2,972,100
Profit margin is	5%

What is the gross profit for the period?
A. ₦119,555
B. ₦127,400
C. ₦150,005
D. ₦154,847
E. ₦157,900

Answer

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Tags: Gross Profit, Inventory, Purchases
Level: Level 1

Topic: Financial Statements Preparation
Series: MAY 2021

FA – May 2016 – L1 – SA – Q9 – Financial Statements Preparation

A question about determining the gross profit margin from a given mark-up rate.

Question

A business marked up its cost by 50%. This would mean a gross profit of:
A. 66⅔% on the market price
B. 66⅔% on the selling price
C. 50% on the selling price
D. 33⅓% on the cost price
E. 33⅓% on the selling price

Answer

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Tags: Gross Profit, Mark-Up
Level: Level 1

Topic: Financial Statements Preparation
Series: MAY 2016

FA – Nov 2024 – L1 – Q5a – Inventory Loss and Statement of Profit or Loss

Compute inventory loss due to fire and prepare a statement of profit or loss for a sole trader.

Question

Mawulolo Enterprise is a retail business that prepares its accounts on 31 March each year. The business maintains a standard gross profit margin of 30% on sales.

The following financial information was extracted from its records as at 31 March 2024:

Item	GH¢
Inventory at 1 April 2023	254,000
Operating Expenses	378,000
Finance Cost	58,000
Purchases	1,306,000
Sales	1,900,000
Inventory in good standing at 31 March 2024	192,000

On 31 March 2024, a fire outbreak in the warehouse destroyed some of the inventory records and goods.

The tax charge for the year is estimated at GH¢30,000.

Required:

i)Calculate the amount of inventory lost.

ii) Prepare the Statement of Profit or Loss for the year ended 31 March 2024

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost of Sales, Financial Adjustments, Fire Loss, Gross Profit, Inventory Valuation, Net Profit
Level: Level 1

Topic: Inventory
Series: Nov 2024

FR – May 2015 – L2 – SB – Q3 – Statement of Cash Flows (IAS 7)

Calculate and analyze financial ratios and prepare cash flows from operating activities for Galadanci Plc.

Question

Statements of Profit or Loss and Other Comprehensive Income for the year ended

	2014 (N’billion)	2013 (N’billion)
Revenue	2,430	1,638
Cost of Sales	(1,701)	(983)
Gross Profit	729	655
Administrative Costs	(311)	(180)
Distribution Costs	(207)	(117)
Finance Costs	(36)	(6)
Profit before Taxation	175	352
Income Tax Expense	(54)	(102)
Profit for the Year	121	250

Statements of Financial Position as at 31 December

Additional Information for 2014

Galadanci Plc acquired 60% of Papanga Plc’s shares to diversify into agriculture.
The company increased its mobile subscriber base, raising the average revenue per user.
No dividends were received from Papanga Plc, and the share value remained constant.

Required:

Calculate the following ratios for the year ended 31 December 2014, analyze Galadanci Plc’s performance, and comment on qualitative factors impacting the company:
- Gross Profit Percentage
- Return on Capital Employed (where capital employed = Total Assets – Current Liabilities)
- Net Profit (PBIT) Percentage
- Asset Turnover
- Gearing Ratio
- Debt/Equity Ratio (16 Marks)
Prepare Galadanci Plc’s Cash Flows from Operating Activities using the indirect method according to IAS 7. (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Asset Turnover, Cash Flow Statement, Gearing Ratio, Gross Profit, Return on Capital Employed
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: MAY 2015

FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements

Identifying which element is not affected when the proprietor consumes goods.

Question

The value of goods taken by the proprietor of a firm for his consumption will affect all but ONE of the following:

A. Gross profit
B. Net profit
C. Inventory balance
D. Company’s capital
E. Inventory valuation.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Gross Profit, Inventory Valuation, Net Profit
Level: Level 1

Topic: Elements of Financial Statements
Series: MAY 2012

FA – May 2014 – L1 – SA – Q11 – Financial Statements Preparation

Calculates the cost of sales from given gross profit and sales figures.

Question

Aye Limited has a gross profit of 11% and its sales are N150,000. What is the cost of sales?
A. N133,500
B. N142,500
C. N154,500
D. N160,000
E. N165,000

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost of Sales, Gross Profit, Income Statement
Level: Level 1

Topic: Financial Statements Preparation
Series: MAY 2014

FA – May 2022 – L1 – SA – Q16 – Financial Statements Preparation

Calculate the gross profit for the period using provided sales and cost of goods sold data.

Question

Calculate the gross profit for the period.

A. ₦535,650,000
B. ₦543,450,000
C. ₦637,950,000
D. ₦647,600,000
E. ₦699,000,000

Answer

Find Related Questions by Tags, levels, etc.

Tags: Financial Reporting, Gross Profit, Inventory
Level: Level 1

Topic: Financial Statements Preparation
Series: MAY 2022

FA – May 2021 – L1 – SA – Q14 – Financial Statements Preparation

Calculate gross profit using opening and closing inventory and purchases.

Question

The following information relates to Owuro Enterprises:

Item	N
Opening inventory	124,000
Closing inventory	96,000
Purchases	2,972,100
Profit margin is	5%

What is the gross profit for the period?
A. ₦119,555
B. ₦127,400
C. ₦150,005
D. ₦154,847
E. ₦157,900

Answer

Find Related Questions by Tags, levels, etc.

Tags: Gross Profit, Inventory, Purchases
Level: Level 1

Topic: Financial Statements Preparation
Series: MAY 2021

FA – May 2016 – L1 – SA – Q9 – Financial Statements Preparation

A question about determining the gross profit margin from a given mark-up rate.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Gross Profit, Mark-Up
Level: Level 1

Topic: Financial Statements Preparation
Series: MAY 2016

Question Tag: Gross Profit

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FA – Nov 2024 – L1 – Q5a – Inventory Loss and Statement of Profit or Loss

Compute inventory loss due to fire and prepare a statement of profit or loss for a sole trader.

Required:

FR – May 2015 – L2 – SB – Q3 – Statement of Cash Flows (IAS 7)

Calculate and analyze financial ratios and prepare cash flows from operating activities for Galadanci Plc.

FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements

Identifying which element is not affected when the proprietor consumes goods.

FA – May 2014 – L1 – SA – Q11 – Financial Statements Preparation

Calculates the cost of sales from given gross profit and sales figures.

FA – May 2022 – L1 – SA – Q16 – Financial Statements Preparation

Calculate the gross profit for the period using provided sales and cost of goods sold data.

FA – May 2021 – L1 – SA – Q14 – Financial Statements Preparation

Calculate gross profit using opening and closing inventory and purchases.

FA – May 2016 – L1 – SA – Q9 – Financial Statements Preparation

A question about determining the gross profit margin from a given mark-up rate.

FA – Nov 2024 – L1 – Q5a – Inventory Loss and Statement of Profit or Loss

Compute inventory loss due to fire and prepare a statement of profit or loss for a sole trader.

Required:

FR – May 2015 – L2 – SB – Q3 – Statement of Cash Flows (IAS 7)

Calculate and analyze financial ratios and prepare cash flows from operating activities for Galadanci Plc.

FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements

Identifying which element is not affected when the proprietor consumes goods.

FA – May 2014 – L1 – SA – Q11 – Financial Statements Preparation

Calculates the cost of sales from given gross profit and sales figures.

FA – May 2022 – L1 – SA – Q16 – Financial Statements Preparation

Calculate the gross profit for the period using provided sales and cost of goods sold data.

FA – May 2021 – L1 – SA – Q14 – Financial Statements Preparation

Calculate gross profit using opening and closing inventory and purchases.

FA – May 2016 – L1 – SA – Q9 – Financial Statements Preparation

A question about determining the gross profit margin from a given mark-up rate.

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FA – Nov 2024 – L1 – Q5a – Inventory Loss and Statement of Profit or Loss

Compute inventory loss due to fire and prepare a statement of profit or loss for a sole trader.

Required:

You're reporting an error for "FA – Nov 2024 – L1 – Q5a – Inventory Loss and Statement of Profit or Loss"

FR – May 2015 – L2 – SB – Q3 – Statement of Cash Flows (IAS 7)

Calculate and analyze financial ratios and prepare cash flows from operating activities for Galadanci Plc.

You're reporting an error for "FR – May 2015 – L2 – SB – Q3 – Statement of Cash Flows (IAS 7)"

FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements

Identifying which element is not affected when the proprietor consumes goods.

You're reporting an error for "FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements"

FA – May 2014 – L1 – SA – Q11 – Financial Statements Preparation

Calculates the cost of sales from given gross profit and sales figures.

You're reporting an error for "FA – May 2014 – L1 – SA – Q11 – Financial Statements Preparation"

FA – May 2022 – L1 – SA – Q16 – Financial Statements Preparation

Calculate the gross profit for the period using provided sales and cost of goods sold data.

You're reporting an error for "FA – May 2022 – L1 – SA – Q16 – Financial Statements Preparation"

FA – May 2021 – L1 – SA – Q14 – Financial Statements Preparation

Calculate gross profit using opening and closing inventory and purchases.

You're reporting an error for "FA – May 2021 – L1 – SA – Q14 – Financial Statements Preparation"

FA – May 2016 – L1 – SA – Q9 – Financial Statements Preparation

A question about determining the gross profit margin from a given mark-up rate.

You're reporting an error for "FA – May 2016 – L1 – SA – Q9 – Financial Statements Preparation"

FA – Nov 2024 – L1 – Q5a – Inventory Loss and Statement of Profit or Loss

Compute inventory loss due to fire and prepare a statement of profit or loss for a sole trader.

Required:

You're reporting an error for "FA – Nov 2024 – L1 – Q5a – Inventory Loss and Statement of Profit or Loss"

FR – May 2015 – L2 – SB – Q3 – Statement of Cash Flows (IAS 7)

Calculate and analyze financial ratios and prepare cash flows from operating activities for Galadanci Plc.

You're reporting an error for "FR – May 2015 – L2 – SB – Q3 – Statement of Cash Flows (IAS 7)"

FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements

Identifying which element is not affected when the proprietor consumes goods.

You're reporting an error for "FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements"

FA – May 2014 – L1 – SA – Q11 – Financial Statements Preparation

Calculates the cost of sales from given gross profit and sales figures.

You're reporting an error for "FA – May 2014 – L1 – SA – Q11 – Financial Statements Preparation"

FA – May 2022 – L1 – SA – Q16 – Financial Statements Preparation

Calculate the gross profit for the period using provided sales and cost of goods sold data.

You're reporting an error for "FA – May 2022 – L1 – SA – Q16 – Financial Statements Preparation"

FA – May 2021 – L1 – SA – Q14 – Financial Statements Preparation

Calculate gross profit using opening and closing inventory and purchases.

You're reporting an error for "FA – May 2021 – L1 – SA – Q14 – Financial Statements Preparation"

FA – May 2016 – L1 – SA – Q9 – Financial Statements Preparation

A question about determining the gross profit margin from a given mark-up rate.

You're reporting an error for "FA – May 2016 – L1 – SA – Q9 – Financial Statements Preparation"

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