Question on: JAMB Accounting - 2024
The following balances were extracted from the books of Adama Ltd on 31st August 2007
| # | |
| Sales | 200000 |
| Drawings | 10000 |
| Land and building | 70000 |
| Furniture | 10000 |
| Debtors | 50000 |
| Creditors | 35000 |
| Capital | 85000 |
| Bank | 10000 |
| General expenses | 10000 |
| Stock (31-08-2007) | 10000 |
| Purchases | 140000 |
| Stock (1-09-2006) | 20000 |
The gross profit is
A
#40,000
B
#50,000
C
#70,000
D
#60,000
Ask EduPadi AI for a detailed answer
Correct Option: B
1. Calculate Cost of Goods Sold (COGS):
Opening Stock: ₦20,000
Purchases: ₦140,000
Closing Stock: ₦10,000
COGS = 20,000 + 140,000 - 10,000 = ₦150,000
2. Calculate Gross Profit:
Sales: ₦200,000
Gross Profit = 200,000 - 150,000 = ₦50,000
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