Case Study
It is important for any business enterprise to prepare the trading, profit and loss accounts inorder to know if the business is operating at a profit or loss.
The information below was obtained from the books of Wakesho traders as at 31st March 1992.
Cash in hand sh. 20,000
Cash at bank sh. 165,000
Current liabilities sh. 350,000
Sales sh. 460,000
Stock April 1, 1991 sh. 75,000
Stock March 31, 1992 sh. 365,000
The firms’ gross profit margin is calculated at 25% and trading expenses at 15% of sales.
From following information, determine
a. Gross profit
b. Cost of goods sold
c. Purchases for the year
d.Net profit
The following information relates to Wambui Traders for the year 1996.
Turnover Sh. 270,000
Margin 40%
Rate of turnover 6 times
Expenses Sh. 40,000
Calculate
a.Gross profit
b.Cost of goods sold
c. Net profit
d. Average stock
The following information extracted from the books of Swafo Traders on 30th September 1998.
Purchases sh. 190,550
Opening stock sh. 35,500
Closing stock Sh. 25,000
Sales sh. 256,050
Sales returns sh. 4,800
Calculate
a.Cost of goods sold
b.Percentage of gross profit to net sales
The following information relates to Demba stores for the period ended 31st October 1993.
Opening stock sh. 25,000
Closing stock sh. 46,000
Sales for the year sh. 369,000
Rate of stock turnover 8 times
Determine
a. Cost of sales
b. Purchases
c. Gross profit