Question
Asked Oct 29, 2019
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Estefan’s accounts showed a gross profit for the year of £27,200. After the accounts were prepared it was found that the opening inventory/stock had been overstated by £1,200 while closing inventory/stock had been understated by £1,700.

What is the amount of Estefan’s corrected gross profit for the year?

   
Answers:
a. 

£24,300

 
b. 

£26,700

 
c. 

£27,700

 
d. 

£30,100

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Expert Answer

Step 1

Gross Profit:  Gross margin is the amount of revenue earned from goods sold over the costs incurred for the goods sold.

Step 2

Calculate the amount of Estefan’s correcte...

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Amount in £ 27,200 1200 Particulars Unadjusted Gross profit ess: Opening inventory overstated Add: Closiing inventory understated Adjusted gross profit 1700 27,700

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