PRC-1 · Chapter 10 · Question 4 of 100
Nina Beauty Parlour has: Opening inventory Rs. 71,000; Closing inventory Rs. 85,000; Purchases (net of returns) Rs. 228,000; Drawings of inventory Rs. 10,000. Gross profit margin is 20%. What is the amount of net sales?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Rs. 255,000
Explanation
Cost of Sales = Opening (71k) + Net Purchases (228k) - Drawings (10k) - Closing (85k) = Rs. 204,000. Since margin is 20%, Cost is 80% of Sales. Sales = 204,000 / 0.8 = Rs. 255,000.
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