Given:<br/>₦<br/>Sales 15,000<br/>Opening stock 5,600<br/>Purchases 9,700<br/>Closing stock 4,400<br/>Gross profit 4,500<br/>Net profit 2,000<br/>From the above data, calculate the rate of turnover
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Correct Answer: Option C
Explanation:
The rate of turnover (stock turnover) is calculated as:<br/>\(\text{Cost of Goods Sold} = \text{Opening stock} + \text{Purchases} - \text{Closing stock}\)<br/>\(\text{Cost of Goods Sold} = 5,600 + 9,700 - 4,400 = 10,900\)<br/>\(\text{Average stock} = \frac{\text{Opening stock} + \text{Closing stock}}{2} = \frac{5,600 + 4,400}{2} = 5,000\)<br/>\(\text{Rate of turnover} = \frac{10,900}{5,000} = 2.18 \text{ times}\)
The rate of turnover (stock turnover) is calculated as:<br/>\(\text{Cost of Goods Sold} = \text{Opening stock} + \text{Purchases} - \text{Closing stock}\)<br/>\(\text{Cost of Goods Sold} = 5,600 + 9,700 - 4,400 = 10,900\)<br/>\(\text{Average stock} = \frac{\text{Opening stock} + \text{Closing stock}}{2} = \frac{5,600 + 4,400}{2} = 5,000\)<br/>\(\text{Rate of turnover} = \frac{10,900}{5,000} = 2.18 \text{ times}\)