Question on: JAMB Accounting - 2022
Use the information below to answer questions 23 and 24.
Incomplete Record (Extract)
Sales......................................N10,600
Rent...........................N200
Depreciation of vehicle (cost N5000) 10%
Gross profit margin is 20%
What is the cost of goods sold?
N4 800
N8 480
N2 320
N 9 900
To find the cost of goods sold (COGS), we can use the formula:
\[ \text{COGS} = \text{Sales} - \text{Gross Profit} \]
Given that the gross profit margin is 20%, we can calculate the gross profit as 20% of the sales:
\[ \text{Gross Profit} = 0.20 \times \text{Sales} \]
\[ \text{Gross Profit} = 0.20 \times N10,600 \]
\[ \text{Gross Profit} = N2,120 \]
Now, we can find the cost of goods sold:
\[ \text{COGS} = \text{Sales} - \text{Gross Profit} \]
\[ \text{COGS} = N10,600 - N2,120 \]
\[ \text{COGS} = N8,480 \]
Therefore, the correct answer is N8,480.
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