A sole trader fixes his prices to achieve a gross profit percentage on sales revenue of 25%. All his sales are for cash. He suspects that one of his sales assistants is stealing cash from sales revenue.
His trading account for the month of July 20X5 is as follows:
| $ | |
| Recorded sales revenue | 39,000 |
| Cost of sales | 30,000 |
| Gross profit | 9,000 |
Assuming that the cost of sales figure is correct, how much cash could the sales assistant have taken?
Answer
Margin = (sale –cost)/sale = 25%, so we can find sale
Cost of sales = $30,000
Therefore sales should be = $30,000 x 100/75 = $40,000
Theft = $40,000 – 39,000 = $1,000