passwella.
Menu

JAMB Principles of Accounts 2009 Question 16

Question 16

Final Accounts of a Sole Trader

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 opening stock is 5% of sales, calculate the purchases.

  1. A.₦95,600
  2. B.₦95,000
  3. C.₦90,600
  4. D.₦85,000
Show the answer and explanation

Answer: C (₦90,600)

Explanation

Cost of goods sold ₦90 000 = opening stock 5 000 + purchases − closing stock 5 600, so purchases = 90 000 + 5 600 − 5 000 = ₦90 600.