Rebeca imports dolls from Taiwan and handpaints them before selling them in the UK. The cost of dolls she held on 1 January 2010 was £42,500, and on 31 December 2010 was £107,300. Her sales in 2010 were £394,500, and her expenses for the year are listed on the right.

She informs you that:

(a) 75% of wages had been paid to those directly engaged in hand-painting dolls; and

(b) in October 2010 dolls costing £12,800 were gifted to charity.

Required:

Identify the gross profit and net profit of Rebeca’s business for the year ended 31 December 2010.

Transcribed Image Text:

Wages Advertising Purchase of dolls Materials for improving dolls Rent Import duty Freight and insurance Telephone and postage Carriage outwards Packing for delivery £28,800 £29,450 £184,250 £11,820 £12,000 £27,540 £16,950 £5,825 £7,650 £7,845