Day: April 1, 2020

The following information relates to a retail business whose financial year ends on 31 December.

• Sales for the period 1 January – 31 December – £240,000
• Stock at 1 January – £10,300
• Purchases for the period 1 January – 31 December – £186,000
• Percentage mark-up applied during the period 1 January – 31 December – 33 1/3%

The firm‘s stock as at 31 December at cost was?

Select ONE answer:

1. £4,300
2. £16,300
3. £36,300
4. None of the above.

 

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – Cost of sales + 33 1/3% = £240,000 Therefore, Cost of sales = £180,000. Cost of sales = Opening stock + purchases – closing stock. Therefore, £180,000 = £10,300 + £186,000 – closing stock. Therefore, closing stock = £16,300
3. Not correct
4. Not correct

 

 

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