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JAMB Principles of Accounts 2004 Question 23

Question 23

Final Accounts of a Sole Trader

Use the information below.
Beginning inventory ?
Purchases ?
Ending inventory ₦4,800
Sales ₦12,800
Wages ₦1,040
Gross profit ₦5,900
The beginning inventory was estimated at 80% of sales.
Determine the amount for the beginning inventory.

  1. A.₦20,140
  2. B.₦10,240
  3. C.₦8,140
  4. D.₦7,240
Show the answer and explanation

Answer: B (₦10,240)

Explanation

Beginning inventory = 80% × ₦12,800 = ₦10,240.