This accounting problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
ScanSolve AI Answer
Here's how to find the cost of goods sold for both parts: The formula for the Cost of Goods Sold (COGS) is: COGS = Opening Stock + Purchases - Closing Stock a) Step 1: Calculate total purchases. Total Purchases = Cash purchases + Credit purchases Total Purchases = K 500.00 + K 820.00 = K 1320.00 Step 2: Calculate the Cost of Goods Sold. COGS = Stock at start + Total Purchases - Stock at end COGS = K 600.00 + K 1320.00 - K 700.00 COGS = K 1920.00 - K 700.00 COGS = K 1220.00 b) Step 1: Calculate total purchases. Total Purchases = Cash purchases + Credit purchases Total Purchases = K 1300.00 + K 1000.00 = K 2300.00 The "Refund inward" is a sales return and is not relevant for calculating the Cost of Goods Sold. Step 2: Calculate the Cost of Goods Sold. COGS = Stock at start + Total Purchases - Stock at end COGS = K 900.00 + K 2300.00 - K 990.00 COGS = K 3200.00 - K 990.00 COGS = K 2210.00 That's 2 down. 3 left today — send the next one.