Sai Baba made sales of N10,000 having computed his gross profit % to sales to be 20. His opening stock was N250 and ending stock is N200. Calculate his purchases.
A. N7950 B. N8050 C. N7050 D. N8950
Correct Answer: A
Explanation
The gross profit percentage of sales would be 20% x N 10,000 = N 2000 If cost of sales + gross profit = N 10,000 = N 2000 :. N 8000 + N 2000 = N 10,000 If cost of goods available for sales less closing stock = cost of sales :. N8200 + N200 = N8000 Hence; cost of goods available for sale = opening stock + purchases :. N8200 = N250 + A = N 8200 – N 250 =N 7950
