Paper 2 · Financial statements - sole trader
Maria's cost of sales for the year ended 31 December 2015 was $384,000. She marks up her goods sold by 33⅓% on cost. What was her gross profit for the year?
A$76,800
B$96,000
C$115,200
D$128,000
Explanation: Selling price = cost × (1 + 1/3) = 512,000. Gross profit = Selling price − Cost of sales = 384,000 = $128,000 (equivalently, a 33⅓% mark-up on cost gives gross profit equal to one third of cost of sales, not a smaller fraction such as a fifth, a quarter, or three tenths of cost).
Derived from ZIMSEC Accounting Paper 2, June 2018, Q1
