Page 69 - Accountancy_F5

Required: Calculate the profit margin as a percentage and provide the actual profit
amount from this sale.

Solution 2.10
Margin is the percent of gross profit on sales value, and the sale is given as TZS 40,000,
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and Mark-up is the percent of gross profit on cost of sale, given as 25% = 25% = 25
100
Mark - up
M argin= # 100
Mark - up+ 100
Mark-up = 25
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Therefore:
25 25
M argin= # 100 = # 100
25 + 100 125

1
5 = 20%

Margin = 20%
Gross profit on sale of a pair of shoes = TZS 40,000 × 20% = TZS 8,000
Cost of sales = TZS 40,000 – 8,000 = TZS 32,000

Example 2.11
Jodari operates a business that involves selling goods. She has shared the following
financial information pertaining to the fiscal year that ended on December 31 , 2023.
st
Details TZS

Opening inventory 393,600
Gross sales 5,120,000
Returns inwards 45,600
Discount allowed to cash customers 163,200
Returns outwards 51,200

Gross purchases 4,096,000
Required: Calculate the value of the closing inventory as of December 31 , 2023,
st
given that the gross profit is 25%.

Student’s Book Form Five
56

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