How to compute total sales, purchases, cost of sales & gross profit?
Required:
1.Compute the total sales for each year, 2010,2011 & 2012.
2.Compute the total purchases for 2010,2011 & 2012.
3.Compute the total cost of sales for 2010,2011 & 2012.
4.Compute the gross profit for each year, 2010,2011 & 2012.
A Company has not prepared financial statements for 3 years since Dec. 31, 2009.
During the 3- year period, the cash receipts & cash disbursements were maintained & sales on account were entered directly into an account receivable ledger.
However, no general ledger postings have been made since the Dec. 31, 2009 closing.
The examination of the records disclosed balances at the beginning and end of 3- year period as follows:
***Dec. 31, 2009 -- Dec. 31, 2012
Less than 1 year old 77,000 -- 141,000
1 to 2 years old 6,000 -- 9,000
2 to 3 years old 0 -- 4,000
Over 3 years old 0 -- 11,000
Total accounts receivable 83,000 -- 165,000
Inventory 58,000 -- 94,000
Accounts payable 25,000 -- 55,000
No account balances were written off during the 3- year. The ratio of gross profit to sales remains constant from year to year. Other data available are:
***2010 -- 2011 -- 2012
Cash received applied to
Current year 744,000 -- 809,000 -- 1,044,000
Accounts of prior year 67,000 -- 75,000 -- 84,000
Accounts of two years prior 3,000 -- 2,000 -- 10,000
Total collections 814,000 -- 886,000 -- 1,138,000
Cash sales 85,000 -- 130,000 -- 156,000
Payments of accounts payable 625,000 -- 706,000 -- 869,000
