Exercise 3•Sipho runs a bottle store. He prices everything so as to give him a gross profit % of 50%These figures are for his year ended 30 June 1995 All figures are in RandsFor the purposes of this exercise, ignore VATCash receivedRent paidVehicle running expenses paidPurchases of stock for the yearWages paidElectricity paidInsurance paidAdvertising paidInterest paidDrawingsOpening stockClosing stock149,7053,6002.40082,6568,5801.3136002841,20030,0002,9023,146The only fixed asset is a van which Sipho bought last year for R30,000. He expects it tolast him for 5 years.His June electricity bill of R118 was only paid in July.Sipho very rarely sells on credit. However, a very close friend, who was waiting for somemoney, was having a party during the last week of June so Sipho agreed that he couldhave credit for 3 weeks. The bill came to R1,243.•Calculate his gross profit for the year.Calculate his gross profit % for the year. What does this tell us ?Calculate his net profit for the year.

Gross profit means the profit of the company after production cost incurred. In other words we can…

Exercise 3 Sipho runs a bottle store. He prices everything so as to give him a gross profit % of 50% These figures are for his year ended 30 June 1995 All figures are in Rands For the purposes of this exercise, ignore VAT Cash received Rent paid Vehicle running expenses paid Purchases of stock for the year Wages paid Electricity paid insurance paid advertising paid nterest paid rawings 149,705 3,600 2.400 82,656 8,580 1.313 600 284 1,200 30,000

Exercise 3 Sipho runs a bottle store. He prices everything so as to give him a gross profit % of 50% These figures are for his year ended 30 June 1995 All figures are in Rands For the purposes of this exercise, ignore VAT Cash received Rent paid Vehicle running expenses paid Purchases of stock for the year Wages paid Electricity paid insurance paid advertising paid nterest paid rawings 149,705 3,600 2.400 82,656 8,580 1.313 600 284 1,200 30,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 5E: Multiple-Step and Single-Step In coin Statements The following items were derived from Gold...

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