The following information is available for the year ended 31 December 20X6 for a trader who does not keep proper accounting records:
| $ | |
| Inventories at 1 January 20X6 | 9,500 |
| Inventories at 31 December 20X6 | 11,250 |
| Purchases | 159,250 |
Gross profit percentage on sales = 40%
Based on this information, what was the trader’s sales figure for the year?
Answer
| $ | |
| Cost of sales | |
| Opening inventory | 9,500 |
| Purchases | 159,250 |
| Less: closing inventory | (11,250) |
| 157,500 |
Margin = (sale –cost)/sale = 40%
Sales = 157,500 x 100/60 = $262,500