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Complete the trading account of Blake Ltd for the year ended 31/12/2018: Trading Account of Blake Ltd for the year ended 31/12/2018 € € Sales 850,000 Less cost of sales Opening stock 75,000 Purchases Less closing stock 115,000 Cost of sales Gross profit - Junior Cycle Business Studies - Question 14 - 2019

Question 14

Complete the trading account of Blake Ltd for the year ended 31/12/2018: Trading Account of Blake Ltd for the year ended 31/12/2018 € € Sales 850,000 Less cost o... show full transcript

Worked Solution & Example Answer:Complete the trading account of Blake Ltd for the year ended 31/12/2018: Trading Account of Blake Ltd for the year ended 31/12/2018 € € Sales 850,000 Less cost of sales Opening stock 75,000 Purchases Less closing stock 115,000 Cost of sales Gross profit - Junior Cycle Business Studies - Question 14 - 2019

Step 1

Calculate Purchases

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Answer

To calculate the Purchases, we need to determine the Cost of Sales first.

The formula to calculate Cost of Sales is:

$ext{Cost of Sales} = ext{Opening Stock} + ext{Purchases} - ext{Closing Stock}$

Given:

Opening Stock = €75,000
Closing Stock = €115,000

So:

Let the Cost of Sales be $C$ , then:

$C = 75,000 + 450,000 - 115,000$

By simplifying:

$C = 410,000$

Hence, the Purchases = €450,000 (as provided).

Step 2

Calculate Cost of Sales

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Answer

Now that we have the Cost of Sales calculated as €410,000, we can include it in the Trading Account.

Step 3

Calculate Gross Profit

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Answer

Gross Profit is calculated as:

$ext{Gross Profit} = ext{Sales} - ext{Cost of Sales}$

Given:

Sales = €850,000
Cost of Sales = €410,000

Therefore:

$ext{Gross Profit} = 850,000 - 410,000 = 440,000$

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Questions answered

Calculate Purchases

Calculate Cost of Sales

Calculate Gross Profit

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