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Sales figure for the year

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

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