The following information relates to a business’s trading during the month of July.
- Gross profit for the month – £100,000
- Expenses for the month – £50,000
- Net profit for the month – equals 15% of the sales for the month
The business’s Cost of Sales for the month of July is?
Select ONE answer:
- £233,333
- £200,000
- £133,333
- £100,000
Show your workings to arrive at your answer, and explain and justify your reasons:
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This multiple choice question is suitable for Accounting KS5 classes.
The answer is 1
Net profit = Gross profit – Expenses = £100,000 – £50,000 = £50,000
£50,000 = 15% of sales
Therefore, Sales = £50,000 / 15 * 100 = £333,333
Cost of Sales = Sales – Gross Profit = £333,333 – £100,000 = £233,333
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