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in Business Studies Form 4 by

Buketi provided us with the following information.

Sales  200,000
Mark up ¼
Opening stock 30,000 
Closing stock 25,000 
Expenses15,250 

Calculate

  1. Gross profit
  2. Net profit
  3. Rate of stock turnover 

1 Answer

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Gross profit

Gross profit= Mark-up/Cost of salesx100
Margin=1/4+1=1/5
1/5=x/200,000
Gross profit=40,000
 

Net profit

Net profit=Gross profit-expenses
=40,000-15,250
=24,750
 

Rate of stock turnover

Rate of stock turnover=Cost of sales/Average stock
Cost of sale= Sales-gross profit
=200,000-40,000
=160,000
ROSTO=160,000/average stock
=160,000/27,500
=5.8 times
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