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16. I bought a house for $4000 and sold it at an advance of 25%. What was its selling price?

17. I sold a farm for $11,500, which was an advance of 15% over the cost. What did it cost?

18. A man sold a horse for $150, which was 25% more than it cost him. If he had sold the horse for $200 find per cent of gain or loss.

19. Sold books for $150 and lost $50. Find the loss per cent. 20. By selling a house for $5000 a real estate dealer gained $500. What was his per cent of gain?

21. I bought a house for % of its value and sold it for 20% more than its value. Find gain per cent.

22. I sold a lot at a gain of 10%, thereby gaining $500. Find the selling price.

23. A man sold a house at a gain of 25%, thereby gaining $1000. What was the cost?

24. A man sold a house for $3600, thereby losing 10% on the transaction. What was the loss?

25. I sold a lot of goods for $1200, thereby gaining 20%. What was the cost?

26. A man sold a lot of goods for $174, thereby losing 13%. What would he have gained by selling the goods for $275?

27. I sold a piece of property for $2500, thereby losing $250. What per cent would I have gained by selling it for $3000?

28. If a merchant buys goods at 10% off the list price, what is his per cent profit if he sells at list price?

29. I sold for $300 an article that cost me $250.

per cent of profit?

What was my

30. By selling a store for $750 more than the cost, I gain 15%. What did it cost me?

31. Which of the following series of discounts is more advantageous to the buyer, 25, 10, 5, or 20, 15, 10?

32. Which of the following series of discounts is more advantageous to the buyer, 40, 25, 10, or 50, 25, and 5?

MISCELLANEOUS PROBLEMS IN DISCOUNT

1. I have an invoice for $369.43, subject to a trade discount of 5%, and a regular discount of 6/10, 5/30. For how much shall I draw my check if the invoice is paid within the 10 days?

2. I bought goods at 10%, 15%, and 5% off. If the discounts amounted to $95.631, what was paid for the goods?

3. A merchant bought a lot of cloth at 30¢ per yard. What must the goods be marked in order that he may throw off 25% from the marked price, and still make 25% profit?

4. If I sell an article at an advance of 25% on the cost, and then discount the bill 5% for cash payments, find the cost if my net gain is $63.75.

5. A certain automobile costs the agent $1000. What must he sell it for to get a commission of 25% on the selling price?

6. I bought 30 flat top desks at $14.50 each; 16 typewriter desks (sanitary) at $22.50 each; and 24 low roll sanitary 55-inch desks at $42.50 each. If these prices represent a discount of 40% from the list price, what is the list price of each kind of desk? If I receive a further discount of 3% for cash, what is the cost to me?

7. By marking suits at $30 each, a tailor sold 15 per day. Could he afford to reduce the price to $25 each if by so doing the sales increased to 28 a day, the cost per suit being $17.50? What per cent would his profits be increased or decreased each day?

8. Chairs cost $45 a dozen less 20% and 15%. At what price should they retail to gain 30%?

9. I bought goods for $400 less 20%, 10%, and 3%. I sold them for $600 less 40% and 10%. Find my gain or loss per cent.

10. A bill for $10,000 is due in 60 days with 5% discount on any part of it paid within 30 days. If $4000 is paid within 30 days, what is the balance due at the expiration of the 60 days?

11. A merchant invested $15,000 in stock. After selling $12,000 worth he took an inventory and found the stock on hand was worth $9000. What was his average rate of gain on the goods sold?

CHAPTER XX

NET PROFITS. COST OF DOING BUSINESS

272. Cost of Doing Business. Gross profits are by no means an indication of the amount of money made by a business man. Out of the gross profits he must pay expenses such as rent, wages and salaries, cost of advertising, light, heat, insurance, taxes. There are losses due to bad debts, etc. In short he must pay the total cost of carrying on the business out of the gross profits. Included in the cost of doing business is a salary for the business man himself.

273. Net Profit. The gross profits less the cost of carrying on the business is net profit. It is comparatively easy to determine the total net profit of a business, but it is not so easy to determine whether or not the sale of any one article yields a net profit and how much.

In practical business it is very important, however, to know the net profit on a particular line of goods, since that will enable the business man to decide whether or not he should change certain details of his business. A complete treatment of this complicated problem is to be found in advanced works on accounting. We give here only the strictly arithmetical elements of the problem.

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274. Apportioning Cost according to Price of Goods. In a small store the most practical method is to divide the cost of carrying on the business among the articles sold in proportion to their cost. In larger stores each department may be treated separately and special kinds of goods may have costs assessed against them in a special way. Thus, if in a small store the buying price of the goods bought and sold in one year is $37,500 and if the total cost of carrying on the business is $7250, then the cost of doing business is 7250 ÷ 37,500 = .1933 19.33%. Hence to find the net gain on an article sold in this store 19.33% of the purchase price must be added to the purchase price and the sum subtracted from the selling price.

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The rate per cent computed in the preceding example is called the cost rate of doing business.

WRITTEN EXERCISES

1. In a store the yearly turnover was $78,250 and the cost of doing business was $12,860. Find the cost rate of doing business. Find the cost rate in each of the following:

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275. Rate of Preceding Years Used in Marking Goods. For the purpose of marking goods the cost rate of doing business is estimated from the rate of the preceding year or better still from the average of several preceding years..

276. Gross Cost. The buying price plus the amount assessed against the article from the cost of doing business is called the gross cost.

WRITTEN EXERCISES

In a certain store the cost rate of doing business for several preceding years averaged 18.57%. Find the gross cost and the net gain on each of the articles given below. Enter the results on a

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CHAPTER XXI

COMMISSION AND BROKERAGE

277. Agent or Broker, Principal. -An agent, commission merchant, or broker transacts business for the account of another. The business transacted is usually selling or buying. The individual or company for whom the agent buys or sells is called the principal.

278. Commission or Brokerage. The agent receives a compensation for his work, which is usually a certain per cent of the amount involved in the transaction. This is called his commission or brokerage.

279. Importance of Commission and Brokerage. There are very many agents and brokers working on commission. There are real estate agents and insurance agents. There are general agents, or brokers who will sell or buy almost anything on commission. There are financial brokers who buy and sell stocks and bonds and other securities. There are few applications of percentage to business which are of more general use than commission and brokerage.

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280. Shipment, Consignment. A lot of goods sent to an agent to be sold is called a shipment by the person who sends the goods, and a consignment by the agent who receives it.

281. Consignor, Consignee. The person sending the goods is called the shipper, or consignor, and the one receiving them is called the consignee.

282. Account Sales. When goods are sold by an agent, he renders a statement to his principal, which is called an account sales. The account sales contains a full account of the gross amount of the sale, the commission charged, and all incidental expenses.

283. Account Purchase. When goods are bought by an agent, he renders a statement to his principal, which is called an account purchase. The account purchase contains a full account of the amount paid, the commission charged, and all incidental expenses.

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