Question

The net sales of a firm is rs 2000000 where as gross profit is 25% on cost. Compute cost of goods sold

Answer 1

I have send the pic of solution...

Answer 2

16,00,000 = Cost of goods sold

Explanation:

Given:

Net sales of the firm = 20,00,000

Gross profit rate = 25% (On cost of goods sold)

Computation of Cost of goods sold:

Net sales = Cost of goods sold + Gross profit

Net sales = Cost of goods sold + 25% of Cost of goods sold

Net sales = Cost of goods sold + 0.25 Cost of goods sold

20,00,000 = 1.25 Cost of goods sold

20,00,000 / 1.25 = Cost of goods sold

16,00,000 = Cost of goods sold

Therefore, the cost of goods sold is 16,00,000

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