JAMB Principles of Accounts 1998 Question 29

Question 29

Manufacturing Accounts

Use the information below to answer questions 28 and 29.
Raw materials inventory at the beginning of a period was ₦46,800 and at the close of the period there was a balance of ₦38,600. From the purchases made during the period, defective materials costing ₦9,200 were returned. Cost of materials consumed during the period was ₦448,500.
What is the cost of materials available for use during the period?

  1. A.₦487,100
  2. B.₦449,500
  3. C.₦448,500
  4. D.₦440,300.
Show the answer and explanation

Answer: A (₦487,100)

Explanation

Available for use = opening stock 46 800 + net purchases (449 500 − 9 200 = 440 300) = ₦487 100.