Reference no: EM132616479

Horse Traders is a company which buys and sells horses and ponies.

On the 1st of January 2019 it had in stock 10 horses which cost on average £1500 each and 15 ponies which cost on average £850 each.

During 2019 the following transactions took place:

1. Bought 12 horses each month at £1700 and 10 ponies at £900 each month.
2. Employed one stable hand at £10,000
3. Paid two Saturday helpers £20 per day (assume 50 weeks)
4. Food for the animals at £400 per month
5. General vets bills of £15,000
6. Advertised in the 'Horse and Hound' at a cost of £145 per month
7. Paid rates of £220 per month
8. Paid insurance of £1450
9. Paid a part-time bookkeeper £100 per month to keep the accounts.
10. Paid a vet to check each animal before it was sold at £65 per animal
11. Had vehicle expenses of £4,500 per year
12. Sold 11 horses each month at an average price of £3,500 and 10 ponies each month at a price of £1550 each for the first 6 months and then sold 13 horses and 12 ponies each month at the same prices for the rest of the year.

Required:

Question (a) Calculate the values of the opening stock, Purchases, Sales and Closing stock.

Question (b) calculate Trading and Profit and Loss account for the year ended 31st December 2019.

Question (c) Calculate the gross profit margin and the net profit as a percentage of sales