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JAMB Principles of Accounts 2009 Question 15

Question 15

Incomplete Records

Adodo Enterprises Trading and Loss Account (Extract)
Opening stock ₦5,000; Purchases ?; Less closing stock ₦5,600; Cost of goods sold ?; Gross profit ?; Total ₦100,000
Sales ₦100,000
If the gross profit margin is 10%, what is the value of the cost of goods sold?

  1. A.₦10,000
  2. B.₦90,000
  3. C.₦105,600
  4. D.₦110,000
Show the answer and explanation

Answer: B (₦90,000)

Explanation

Gross profit = 10% × 100 000 = ₦10 000, so cost of goods sold = 100 000 − 10 000 = ₦90 000.