The following data relates to a firm which has been trading for several years.
Assuming that the firm’s cost of sales is calculated by reference to its purchases and stock figures only, the total of its purchases during 2018 was?
Select ONE answer:
- £100,000
- £170,000
- £450,000
- £550,000
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 4
4. Stock at 1 January 2018 = Stock at 31 December 2017. 2018 Cost of Sales (£500,000) = Stock at 1 January 2018 (£150,000) + Purchases during 2018 (missing figure) – Stock at 31 December 2018 (£200,000). Therefore, purchases during 2018, the figure required to solve the equation = £550,000.
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