Page 77 - Accountancy_F5

Statement of insurance claim as at 31 December 2023
st
Details TZS TZS

Opening inventory (W1) 4,000,000
Add: Purchases 8,500,000
Less: Purchases of plants (capital expenditure) (500,000)
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Cost of goods available for sale 12,000,000
Less: Cost of sales
Sales 11,800,000
Less: Gross profit (W2) 2,950,000 8,850,000
Closing inventory 3,150,000
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Less: Amount of salvage inventory 300,000
Cost of goods destroyed by fire 2,850,000

,
, 2 500 000
,
Amount of Insurance claim = # , 2 850 000 = TZS , 2 261 905
,
, 3 150 000
,
Amount of insurance claim = TZS 2,261,905
Workings:
W1: Determine the cost value of inventory:
3,600,000 = 90%
? = 100%

, 3 600 00
,
,
90 # 100 = TZS , 4 000 000
W2: Determining the amount of gross profit:
Mark-up is given as 33.33%. This is the percentage of gross profit on cost. Changing
it to margin:
Mark - up
Changing mark - up to m argin = # 100
Mark - up + 100
1
33 3 1 1
= 1 # 100 = : 33 3 ' 133 D # 100
3
100 + 33
3
100 400 100 3 300
= : 3 ' 3 D # 100 = : 3 # 400 D # 100 = , 1 200 # 100 = 25 %

Goss profit = 25% × 11,800,000 = TZS 2,950,000

Student’s Book Form Five
64

23/06/2024 17:35
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ACCOUNTANCY_DUMMY_23 JUNE.indd 64 23/06/2024 17:35