complete solution MGT101 GDB - Virtual University of Pakistan 2021-10-20T05:04:03Z https://vustudents.ning.com/forum/topics/complete-solution-mgt101-gdb?groupUrl=mgt101financialaccounting1&groupId=3783342%3AGroup%3A58702&id=3783342%3ATopic%3A5171144&feed=yes&xn_auth=no same solution that i have tag:vustudents.ning.com,2015-08-03:3783342:Comment:5173688 2015-08-03T18:26:32.612Z M ɩ ɽ z ʌ イ タ り ɭ ʀ https://vustudents.ning.com/profile/TahirIkramMirza <p>same solution that i have</p> <p>same solution that i have</p> Correct tag:vustudents.ning.com,2015-08-03:3783342:Comment:5173670 2015-08-03T18:04:47.338Z Shahbaz Majeed https://vustudents.ning.com/profile/ShahbazMajeed <p>Correct</p> <p>Correct</p> Guys...The above calculation… tag:vustudents.ning.com,2015-08-03:3783342:Comment:5173568 2015-08-03T18:04:12.246Z Shahbaz Majeed https://vustudents.ning.com/profile/ShahbazMajeed <p>Guys...The above calculation is completely wrong.</p> <p>They have ignored financial expenses of 1% of sales. If we put that in above calculations, the whole result is changed. My solution</p> <p></p> <p>Sales = 1,250,000</p> <p>CGS  = (1,000,000)</p> <p>G.P = 250,000</p> <p>Financial, selling and admin exps (15% + 1%) = 200,000</p> <p>OP = 50,000</p> <p></p> <p>Now don't ask complete calculations <img src="http://www.bkserv.net/images/Grin.gif"/></p> <p>Guys...The above calculation is completely wrong.</p> <p>They have ignored financial expenses of 1% of sales. If we put that in above calculations, the whole result is changed. My solution</p> <p></p> <p>Sales = 1,250,000</p> <p>CGS  = (1,000,000)</p> <p>G.P = 250,000</p> <p>Financial, selling and admin exps (15% + 1%) = 200,000</p> <p>OP = 50,000</p> <p></p> <p>Now don't ask complete calculations <img src="http://www.bkserv.net/images/Grin.gif"/></p> Thnx farukh budy tag:vustudents.ning.com,2015-08-03:3783342:Comment:5173641 2015-08-03T17:35:31.406Z Muhammad Junaid https://vustudents.ning.com/profile/MuhammadJunaid366 Thnx farukh budy Thnx farukh budy Definition of markup: Markup … tag:vustudents.ning.com,2015-08-03:3783342:Comment:5173640 2015-08-03T17:35:21.722Z + M.Tariq Malik https://vustudents.ning.com/profile/malik12 <p>Definition of markup:</p> <p><b>Markup</b><span> is the difference between the cost of a good or service and its selling price.</span></p> <p><span>So basically markup is the amount of gross profit</span></p> <p><span>In our case, Gross profit is 25% of cost of goods sold. Since we have no defined ratio of profit margin therefore, we can convert markup into margin through standard procedure:</span></p> <p><span>1st we convert the markup into fraction i.e. 1/4</span></p> <p><span>To convert…</span></p> <p>Definition of markup:</p> <p><b>Markup</b><span> is the difference between the cost of a good or service and its selling price.</span></p> <p><span>So basically markup is the amount of gross profit</span></p> <p><span>In our case, Gross profit is 25% of cost of goods sold. Since we have no defined ratio of profit margin therefore, we can convert markup into margin through standard procedure:</span></p> <p><span>1st we convert the markup into fraction i.e. 1/4</span></p> <p><span>To convert markup into margin, we add +1 to denominator i.e. 1/5</span></p> <p><span>1/5 = 20%</span></p> <p><span>GP/Cost=25%</span></p> <p><span>GP/Sales=20%</span></p> <p><span>OP Expense/Sales=15%</span></p> <p><span>20% - 15% = 5% = 0.05 (Operating Margin)</span></p> <p><span>To find Net sales we use the formula for finding operating margin i.e.</span></p> <p><span>Operating Margin = Operating Income/Net Sales</span></p> <p><span>0.05 = 50,000/Net Sales</span></p> <p><span>Net Sales = 50,000/0.05</span></p> <p><span>Net Sales = 1,000,000</span></p> <p><span>For COGS,</span></p> <p><span>Cost of goods sold = 80% of Sales (Since GP is 20% of Sales)</span></p> <p><span>80% x 1,000,000 = 800,000 = Cost of goods sold</span></p> <p><span>Ending Inventory = 500,000+700,000-800,000 = 400,000</span></p> Right solution tag:vustudents.ning.com,2015-08-03:3783342:Comment:5173399 2015-08-03T17:35:18.857Z Muhammad Junaid https://vustudents.ning.com/profile/MuhammadJunaid366 Right solution Right solution Suppose,Sales= 100% =1 G.P =… tag:vustudents.ning.com,2015-08-03:3783342:Comment:5173461 2015-08-03T17:35:10.880Z + M.Tariq Malik https://vustudents.ning.com/profile/malik12 <p>Suppose,Sales= 100% =1</p> <p>G.P = 25% of CGS = 0.25 CGS</p> <p>Sales – CGS = GP</p> <p>1- CGS = 0.25 CGS</p> <p>1                      =0.25 CGS + CGS</p> <p>1                      = CGS(0.25 + 1)</p> <p>1                      = 1.25 CGS</p> <p>1/1.25 = CGS</p> <p>0.8        = CGS</p> <p>80% of sales = CGS</p> <p>Sales – CGS = GP</p> <p>1 – 0.80 = GP</p> <p>0.20 = GP</p> <p>20% of sales = GP</p> <p>Sales – CGS = Operating + Selling &amp; Admin Exp</p> <p>1 – 0.80 sales = 50,000 + 0.15…</p> <p>Suppose,Sales= 100% =1</p> <p>G.P = 25% of CGS = 0.25 CGS</p> <p>Sales – CGS = GP</p> <p>1- CGS = 0.25 CGS</p> <p>1                      =0.25 CGS + CGS</p> <p>1                      = CGS(0.25 + 1)</p> <p>1                      = 1.25 CGS</p> <p>1/1.25 = CGS</p> <p>0.8        = CGS</p> <p>80% of sales = CGS</p> <p>Sales – CGS = GP</p> <p>1 – 0.80 = GP</p> <p>0.20 = GP</p> <p>20% of sales = GP</p> <p>Sales – CGS = Operating + Selling &amp; Admin Exp</p> <p>1 – 0.80 sales = 50,000 + 0.15 sales</p> <p>0.20 sales – 0.15 sales = 50,000</p> <p>0.05 Sales                       = 50,000</p> <p>Sales = 50,000/0.05</p> <p><b>Sales = 1000,000</b></p> <p> </p> <p> </p> <p>CGS (80% of sales)    = 1000,000 * 80%</p> <p>= 800,000</p> <p>GP (20% of sales) = 1000,000 *20%</p> <p>                                = 200,000</p> <p>                             <b>Income Statement</b></p> <div><p>Sales                                                                              1000, 000</p> <p>Less: Cost of Goods Sold (CGS)                                   <u>    800,000</u></p> <p><b>Gross Profit</b>                                                                  200,000</p> <p>Less: Selling Admin expense                             <u>150,000</u></p> <p>(15% of sales)</p> <p><b>Operating Profit</b>                                                 <b><u>50,000</u></b></p> </div> <p> </p> <p><b>Closing Stock</b>        = Opening Stock + Purchases – CGS</p> <p>                               = 500,000 + 700,000 – 800,000</p> <p>                               = 1200,000 – 800,000</p> <p><b>Closing Stock                 = 400,000</b></p> <p>Closing inventory is deducted from cost of goods sold (CGS) because closing inventory is still in hand.According to <b>“Matching concept”</b> only those expenses can be recognized against which we have not recorded any revenue because closing inventory is not sold and still in hand. Therefore we shall not record closing inventory’s cost in CGS and shall deduct from cost of goods sold (CGS).</p> <p><b> </b></p>          Gross Profit – admin… tag:vustudents.ning.com,2015-08-03:3783342:Comment:5173544 2015-08-03T17:34:54.667Z + M.Tariq Malik https://vustudents.ning.com/profile/malik12 <p>         Gross Profit – admin Expenses</p> <p>                       0.25sales – 0.15sales = 50000</p> <p>                         0.10 sales = 50000</p> <p>                         Sales = 50000<b>/</b>0.10</p> <p>                         Sales =500000</p> <p>     </p> <table border="1" cellspacing="0"> <tbody><tr><td valign="top" width="198"><p><b>     Particulars</b></p> </td> <td valign="top" width="150"><p>    <b>Amount</b></p> </td> </tr> <tr><td valign="top" width="198"><p>  …</p> </td> </tr> </tbody> </table> <p>         Gross Profit – admin Expenses</p> <p>                       0.25sales – 0.15sales = 50000</p> <p>                         0.10 sales = 50000</p> <p>                         Sales = 50000<b>/</b>0.10</p> <p>                         Sales =500000</p> <p>     </p> <table border="1" cellspacing="0"> <tbody><tr><td width="198" valign="top"><p><b>     Particulars</b></p> </td> <td width="150" valign="top"><p>    <b>Amount</b></p> </td> </tr> <tr><td width="198" valign="top"><p>     sales</p> </td> <td width="150" valign="top"><p>    500,000</p> </td> </tr> <tr><td width="198" valign="top"><p>   Less CGS</p> </td> <td width="150" valign="top"><p>    (375,000)</p> </td> </tr> <tr><td width="198" valign="top"><p>  Gross Profit</p> </td> <td width="150" valign="top"><p>   25%(sales)</p> </td> </tr> <tr><td width="198" valign="top"><p> Less admin expenses</p> </td> <td width="150" valign="top"><p>    125000</p> </td> </tr> <tr><td width="198" valign="top"><p> Operating stock</p> </td> <td width="150" valign="top"><p>     (75,000)</p> <p>      50,000</p> </td> </tr> <tr><td width="198" valign="top"><p>Financial expenses</p> </td> <td width="150" valign="top"><p>  1%(sales)</p> <p>      (5000)</p> </td> </tr> <tr><td width="198" valign="top"><p> Net profit</p> </td> <td width="150" valign="top"><p>      45,000</p> </td> </tr> </tbody> </table> <p>  </p> <p>            Closing stock = Opening + purchases – CGS</p> <p>                                   = 500,000 +700,000 – 375,000</p> <p>                                   = 825000 </p> tag:vustudents.ning.com,2015-08-03:3783342:Comment:5173236 2015-08-03T17:30:06.582Z + M.Tariq Malik https://vustudents.ning.com/profile/malik12 <p><img src="http://storage.ning.com/topology/rest/1.0/file/get/3132274999?profile=original"/></p> <p><img src="http://storage.ning.com/topology/rest/1.0/file/get/3132274999?profile=original"/></p> where is the Financial expens… tag:vustudents.ning.com,2015-08-03:3783342:Comment:5173028 2015-08-03T15:41:19.865Z M ɩ ɽ z ʌ イ タ り ɭ ʀ https://vustudents.ning.com/profile/TahirIkramMirza <p><span>where is the Financial expenses are 1% of sales??</span></p> <p><span>where is the Financial expenses are 1% of sales??</span></p>