Question

Mary buys and sells ladies' handbags. She buys for cash and sells on one month's credit....

Mary buys and sells ladies' handbags. She buys for cash and sells on one month's credit. She pays £20 for each bag and sells them for £35 each. During March, her first month of trading, she bought 50 handbags for cash and had 10 handbags remaining in inventory at the month end. Ignoring any other expenses or payments, which of the following statements is true for March?

Select one:

a. The business made a gross profit for the month of £400 and its bank balance increased by £400 as a result of trading.

b. The business made a gross profit for the month of £600 and its bank balance increased by £1,400 as a result of trading.

c. The business made a gross profit for the month of £600 and its bank balance decreased by £1,400 as a result of trading

d. The business made a gross profit for the month of £600 and its bank balance decreased by 1,000 as a result of trading.

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