During the year to 31 March 2013, a firm earns £50,000 sales revenue. During the year it spent £24,000 purchasing goods for resale. Inventory as at 1 April 2012 was valued at £8,500 and by the end of the year this had risen to £9,900.

£

£

Sales

50,000

Less Cost of goods sold:

Opening inventory

8,500

Purchases

24,000

32,500

Less Closing inventory

9,900

22,600

Gross profit

27,400