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JAMB Principles of Accounts 1995 Question 13

Question 13

Final Accounts of a Sole Trader

The following represents extracts from the trading account of a retail outlet for a given month:
Opening stock ₦2 400
Closing stock ₦6 400
Other expenses ₦2 000
Sales ₦11 000
Profit ₦900
What is the purchase figure for the month?

  1. A.₦13 000
  2. B.₦12 100
  3. C.₦12 000
  4. D.₦11 200
Show the answer and explanation

Answer: B (₦12 100)

Explanation

Gross profit = net profit 900 + expenses 2 000 = ₦2 900. Cost of sales = 11 000 − 2 900 = ₦8 100. Purchases = 8 100 + closing stock 6 400 − opening stock 2 400 = ₦12 100.