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JAMB Principles of Accounts 2008 Question 15

Question 15

Incomplete Records

Trading Account (Extract)
Opening stock ₦19 500; Add purchases ₦68 700 = ₦88 200
Less closing stock ?
Cost of goods sold ?
Gross profit c/d ?
Sales ₦96 000
The gross profit margin is 20%.
What is the gross profit?

  1. A.N88 200
  2. B.N76 800
  3. C.N19 200
  4. D.N12 900
Show the answer and explanation

Answer: C (N19 200)

Explanation

Gross profit margin is profit as a percentage of sales: 20% × 96 000 = ₦19 200.