Response to the following problem:
A trader dealing in a standard line of goods which he regularly sold at 25% above cost price, discovered on the morning of 17th March, 1962-a Monday-that during the week-end all his stock had been destroyed by fire. His stock was fully covered by insurance, but no records were immediately available from which he could calculate how much he should claim from the insurance company. His account books were, however, undamaged and from them he was able to obtain the following figures:
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£ |
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Stock on Hand 1st January, 1962 at cost price
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6,000
|
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Purchases from 1st January to 14th March, 1962
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14,000
|
|
Sales from 1st January to 14th March, 1962
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18,000
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State the value of the stock destroyed by fire, showing your calculations.