Question 7
Final Accounts of a Sole TraderUse the following information to answer questions 7 to 9.
Stock (1/1/2020): Le 160,000
Stock (31/12/2020): Le 240,000
Returns inwards: Le 16,000
Sales: Le 362,000
Returns outwards: Le 24,000
Gross profit: Le 64,000
The purchases is
- A.Le 386,000
- B.Le 378,000
- C.Le 362,000
- D.Le 338,000
Show the answer and explanation
Answer: A (Le 386,000)
Explanation
Net sales = 362,000 − 16,000 = 346,000; cost of sales = 346,000 − 64,000 = 282,000. Net purchases = 282,000 + 240,000 − 160,000 = 362,000, so purchases = 362,000 + 24,000 returns outwards = Le 386,000.