The following information relates, to a sole trader whose financial year ends on 31 December.
- Sales for the period 1 January – 31 December – £200,000
- Purchases for the period 1 January – 31 December – £130,000
- Stock at 1 January – £50,000
- Percentage mark-up applied on all goods during the period 1 January – 31 December was 25%
The sole trader’s stock as at 31 December, at cost, was?
Select ONE answer:
- £20,000
- £26,000
- £40,000
- £70,000
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
- Correct – Cost of sales + 25% = £200,000 Therefore, Cost of sales = £160,000. Cost of sales = Opening stock + purchases – closing stock. Therefore, £160,000 = £50,000 + £130,000 – closing stock. Therefore, closing stock = £20,000
- Not correct
- Not correct
- Not correct
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