The following information is available for the years 2017, 2018 and 2019:

The inventory valuations used above at the end of 2017 and at the end of 2018 were inaccurate. The inventory at 31 December 2017 had been under-valued by £1,000, whilst that at 31 December 2018 had been over-valued by £3,000.
Required:

(a) Give the corrected figures of gross profit for each of the years affected by the errors in inventory valuation.

(b) Using the figures in the revised trading accounts, calculate for each year:
(i) the percentage of gross profit to sales, and (ii) the rate of turnover of inventory.

Transcribed Image Text:

Opening inventory Purchases Less Closing inventory Cost of sales Sales Gross profit 2017 10,000 70,000 80,000 (20,000) 60,000 90,000 30,000 2018 20,000 86,000 106,000 (28,000) 78,000 125,000 47,000 2019 28,000 77,000 105,000 (23,000) 82,000 120,000 38,000