An Entity Sells Goods Earning a Constant Mark Up of 25

Multiple Choice

An entity sells goods earning a constant mark up of 25%. Sales revenue in the period is £250,000. Opening inventory is valued at £5,000; closing inventory is valued at £10,000. Purchases were £225,000. The owner suspects theft; calculate the expected loss from theft given all the previous figures are correct.

A) £20,000
B) £32,500
C) £30,000
D) £25,000