MCQ, O-LEVEL Principle of Accounts for june 07

[dasani]

A trader provides the following information.
Cost of goods sold $40,000
Gross Profit 20%


What are the sales?

Can anyone help me how to answer this MCQ. Explain me how i can the answer....

 

[Mr.Pakistan]

change the margin into markup!! 20% will be 25% in markup!! it is calculated in this way

20/100=1/5
1/5-1=1/4 * 100 =25%

apply this to CGS and u will get the grossprofit......finally add cgs and gp u will get sales!! 50000

 

[workaholic]

Correct ..... if the 20% gp is margin...... if its markup then no need to do all this...... just apply 20% to cost of goods sold and then add the result to cost of goods sold....

 

[dasani]

thank a lot