If the opening stock is 5% of sales. calculate the purchases
A.
N95,600
B.
N95,000
C.
N90,600
D.
N85,000
Correct answer is C
opening stock + cost of goods sold - closing stock = purchase
Remember COGS was given as;
cost of goods sold = sales - profit (10% of sales)
100,000 - 10,000 = 90,000
Hence we have;
purchase = 5,000 + 90000 - 5,600 = 90,600