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ACCA F3 Gross Profit

During the year ended 30 June 20X9 joy purchased $12,340 of inventory for resale. Over the year, inventory held fell by $9,240.

1. If she used a mark up of $20%, what was the gross profit for the year?

2. If she used a gross profit of 20%, what was the gross profit for the year?.

Suggested solutions

PURCHASE	12,340
PLUS DECREASE IN INVENTORY	9,240
=COST OF SALES	21,580
MARK UP %	20
ANSWER 20 % of 21,580	4,316
GROSS PROFIT %	20
cost of sale/ (1 -20/100) * 20/100	5,395

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