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JAMB Principles of Accounts 2005 Question 13

Question 13

Final Accounts of a Sole Trader

Musa merchants Trading and Profit and Loss Account for the year ended Dec. 31st, 2003
Stock (1/1/2003) ₦60 000
Purchases ₦90 000
Cost of goods available for sale ₦150 000
Stock 31/12/2003 ?
Cost of goods sold ?
Gross profit ₦180 000
Total ₦290 000 | Sales ₦290 000
Determine the closing stock

  1. A.₦20 000
  2. B.₦30 000
  3. C.₦40 000
  4. D.₦50 000
Show the answer and explanation

Answer: C (₦40 000)

Explanation

Cost of goods sold = 290 000 − 180 000 = ₦110 000. Closing stock = 150 000 − 110 000 = ₦40 000.