The chief executive officer of Sparkrite Ltd, a trading business, has just received summary sets of financial statements for last year and this year:

Sparkrite Ltd Income statements for years ended 30 September Last year This year

£000 £000 £000 £000 Sales revenue 1,800 1,920 Cost of sales Opening inventories 160 200 Purchases 1,120 1,175 1,280 1,375 Closing inventories (200) (250)

(1,080) (1,125)

Gross profit 720 795 Expenses (680) (750)

Profit for the year 40 45 Exercises Solutions to these questions can be found at the back of the book on page 759.

AppendixLO1