Answer to Question #311232 in Accounting for zohaib panjgoor

Question

Balances at 31 January 2009:

Debtors control account.............................$32,400

Creditors control account...........................$25,200

Inventory...................................................$30,000

Balances at 28 February 2009:

Debtors control account.............................$24,000

Creditors control account...........................$29,160

Inventory...................................................$36,000

Extract from cash payments journal at 28 February 2009:

Payments to creditors.................................$41,040

Additional Information:

a) Gross profit mark-up is 20% on cost

b) Inventory is kept on the perpetual system

c) All purchases and 80% of sales are on credit

Required:

a) Calculate purchases.

b) If purchases during February were $39,000 what is the Cost of Goods Sold for February?

Answer 1

a). $Purchases = 29160+ 41040 -25200 = 45000$

b) $cost of goods sold = opening stock + purchases - closing stock$

$Cost of goods sold = 30000 +39000 - 36000 = 33000$