Salome is in business as a sole trader, selling wedding dresses and accessories. In the month of July 20X7 she makes sales totalling £9 470. Her opening inventory was £19 570, and purchases during the month were £6 251. Her closing inventory at the end of July 20X7 was £650 higher than it had been at the beginning of the month. Salome’s gross profit for July 20X7 is:

Sadia sells car first aid kits by mail order. The cost to her of each kit purchased from the manufacturer is £12.50. Her selling price per kit is £18.25. At the beginning of August 20X1 she has 180 kits in inventory. She sells 250 kits during August 20X1 and has 153 left in inventory at the end of the month.

How many first aid kits has Sadia purchased in August 20X1?

Sadia sells car first aid kits by mail order. The cost to her of each kit purchased from the manufacturer is £12.50. Her selling price per kit is £18.25. At the beginning of August 20X1 she has 180 kits in inventory. She sells 250 kits during August 20X1 and has 153 left in inventory at the end of the month.

What is Sadia’s gross profit for the month of August 20X1?

Samir is a sole trader. His revenue for 20X5 is £386 438. Cost of sales for the year is £284 431 and expenses total £39 950.

The trade association of which Samir is currently president has recently surveyed its members about their business performance. The survey has found that the average net profit margin is 17.2% and the average gross profit margin is 26.9%.

Samir compares his own recent results to those from the survey and discovers that his business is yielding:

During his trading year to 31 December 20X3 Solomon sells 19 000 units of inventory at £29.75 each. His gross profit on each unit is £7.50. He purchased inventory during the year at a total cost of £435 655. At 31 December 20X3 his stocktaking shows that he has 2560 units still in inventory.

What was the value of Solomon’s opening inventory on 1 January 20X3?

Smita has a business selling children’s clothes. Her revenue and purchases for the two years ending 31 October 20X7 are as follows:

20X7
Revenue £186 750
Purchases £130 555

20X6
Revenue £185 250
Purchases £128 280

Her closing inventory at 31 October 20X7 was £16 808 and her gross profit margin in both years is 28%. Smita’s opening inventory at 1 November 20X5 was:

Skip’s business is hiring out boats. Hire fees for his financial year ending 31 May 20X1 are £100 900. Against this are set boat maintenance costs of £31 460, wages £10 590, licensing fees £5 000, administration costs £6 241, mooring charges £9 490 and other costs of £11 885. Skip expects his hire fee income to rise by 15% in the financial year to 31 May 20X2. If his net profit margin remains the same in 20X2 as in 20X1, how much net profit, to the nearest £, can Skip expect to make in 20X2?

Stafford’s revenue for 20X4 is £269 685, with cost of sales at £201 185 and total expenses of £50 431. Revenue in 20X4 was 15% higher than in 20X3. Gross profit margin and net profit margin in both years were the same. What were Stafford’s total expenses in 20X3 (to the nearest £)?

Which one of the following statements is true?

A sole trader’s drawings appear in his or her accounts as:

10. Which of the following statements are true?

1. Closing inventory appears in the statement of financial position and as a deduction in calculating cost of sales in the trading account;
2. A service business does not trade in goods and therefore does not need to produce a trading account;
3. Sundry items of income such as bank interest are included in the income statement as an addition to gross profit.