- 9 Marks
FA – L1 – Q93 – Inventory
Question
(A). A FreshProduce made sales during the month of GH₵49,200. Opening inventory amounted to GH₵3,784 and month-end inventory was GH₵5,516. During the month, he purchased for cash goods which cost GH₵38,632.
Required:
Determine the gross profit and calculate the gross profit percentage as a percentage of sales value.
(B). A Competitor has made sales of GH₵50,100 at a fixed mark-up of 25%. Closing inventory was valued at GH₵5,438 and he purchased goods during the month amounting to GH₵38,326.
Required:
Determine the value of the opening inventory.
(C) . A CommunityMart makes sales at a fixed gross profit of 10% on sales value. Sales during the month amounted to GH₵186,460; closing inventory was GH₵16,800 and represents an increase of 25% over the value of the opening inventory.
Required:
Determine the cost of purchases during the month.
Answer
(A)
| FreshProduce | GH₵ |
|---|---|
| Sales revenue | 49,200 |
| Less Cost of goods sold | |
| Opening inventory | 3,784 |
| Purchases | 38,632 |
| 42,416 | |
| Less Closing inventory | (5,516) |
| Cost of goods sold | 36,900 |
| Gross profit | 12,300 |
Gross profit percentage = (12,300 / 49,200) × 100 = 25%
(B)
| Competitor | GH₵ |
|---|---|
| Sales revenue | 50,100 |
| Cost of goods sold (100/125 × GH₵50,100) | 40,080 |
| Gross profit | 10,020 |
| Opening inventory (bal fig) | 7,192 |
| Purchases | 38,326 |
| 45,518 | |
| Less Closing inventory | (5,438) |
| Cost of goods sold | 40,080 |
(C)
| CommunityMart | GH₵ |
|---|---|
| Sales revenue | 186,460 |
| Cost of goods sold | (167,814) |
| Gross profit (10% × GH₵186,460) | 18,646 |
| Opening inventory (100/125 × GH₵16,800) | 13,440 |
| Purchases (bal fig) | 171,174 |
| 184,614 | |
| Closing inventory | (16,800) |
| Cost of goods sold | 167,814 |
- Tags: Cost of Sales, Financial accounting, Gross Profit, Inventory, Purchases
- Level: Level 1
- Topic: Inventory
- Uploader: Samuel Duah