Prichard’s sales in the year ended 31 December 2011 were £390,000. The sales produced a gross profit ratio of 30%.

(a) If the cost of inventory on 31 December 2010 was £78,000 and that of 31 December 2011 was £96,000, what would be his inventory days?

(b) If Prichard reports his inventory days as 90, and the cost of closing inventory as £54,000, what would have been the cost of his opening inventory?

(c) What will be Prichard’s sales in 2011, if he consistently so fixes his sale prices to produce a gross profit ratio of 20% and reports his opening inventory as £54,000, purchases as £292,000 and inventory days as 60?

Transcribed Image Text:

x 128 days y 109 days z 120 days