Departments K Y Opening 2,500 800 Purchases 120,000 100,000 Sales 180,000 200,000 Salary 8,000 30,000 Closing stock 3,000 1,500 Rate expenses of 1,500 are apportioned in the ratio 1:2 The gross profit for K is
A. # 60,700 B. #23,500 C. #60,500 D. #82,500
Correct Answer: C
Explanation
Sales - Cost of Goods Sold = Gross Profit COGS = Beginning Inventory + Purchases During the Period – Ending Inventory. COGS = 2,500, + 120,000 - 3,000 = 119,500 gross profit for K = 180,000 - 119,500 = 60,500 Â
