I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

PART D: RECORDING TRANSACTIONS AND EVENTS 

 

110

 

 

$ 

$ 

Sales (45,000 units) 

 

 230,000 

Opening inventory (10,000 units)* 

  20,000 

 

Add purchases (40,000 units) 

  95,000 

 

 

115,000 

 

Less closing inventory (5,000 units) 

  12,000 

 

Cost of sales (45,000 units) 

   103,000 

Gross profit 

   127,000 

* Taken from the closing inventory value of the previous accounting year 

QUESTION 

Costs of goods sold

 

On 1 January 20X6, the Grand Union Food Stores had goods in inventory valued at $6,000. During 

20X6 its proprietor purchased supplies costing $50,000. Sales for the year to 31 December 20X6 

amounted to $80,000. The cost of goods in inventory at 31 December 20X6 was $12,500. 

What is the gross profit for the year? 

ANSWER 

 

$ 

$ 

Sales 

 

 80,000 

Opening inventories 

   6,000 

 

Add purchases 

 50,000 

 

 

 56,000 

 

Less closing inventories 

 12,500 

 

Cost of goods sold 

 

 43,500 

Gross profit 

 

 36,500 

 

1.5 The cost of carriage inwards and outwards