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WAEC Accounting 2021 Paper

Question : 13

Total: 50

Use the following information to answer this question

Solution:

Concept:

Stock turnover period is the number of days, on average, that goods remain in stock before being sold.

Explanation:

First, find the cost of goods sold using the formula:

\text{Cost of goods sold} = \text{Opening stock} + \text{Purchases} - \text{Closing stock}

= 60{,}000 + 230{,}000 - 40{,}000 = 250{,}000

Next, calculate the average stock:

\text{Average stock} = \frac{60{,}000 + 40{,}000}{2} = 50{,}000

Now, compute the stock turnover rate:

\text{Stock turnover} = \frac{250{,}000}{50{,}000} = 5 \text{ times}

Finally, convert this into the stock turnover period for the year:

\text{Stock turnover period} = \frac{365}{5} = 73 \text{ days}

Answer:

73 days

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