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JAMB Principles of Accounts 1994 Question 45

Question 45

Departmental Accounts

Perebeni Enterprises has two departments, A and B, with the following information:
Opening stock: A ₦5 000; B ₦1 500
Purchases: A ₦26 000; B ₦3 000
Closing stock: A ₦7 000; B ₦2 500
Sales: A ₦45 000; B ₦4 000
The following expenses are to be shared in the ratio of 4 : 1
Rent ₦8 300
General expenses ₦3 200
What was the company's gross profit for the year?

  1. A.₦11,500
  2. B.₦12,500
  3. C.₦20,000
  4. D.₦23,000
Show the answer and explanation

Answer: D (₦23,000)

Explanation

A: cost of sales = 5 000 + 26 000 − 7 000 = 24 000, gross profit 21 000. B: cost of sales = 1 500 + 3 000 − 2 500 = 2 000, gross profit 2 000. Total = ₦23 000.